5 Things to Know Before the Stock Market Opens Monday

Here are five things investors are watching as the trading day begins:

The Trump administration intensified its focus on trade this past weekend. Following a pause in trade discussions with Canada, President Trump traveled to Asia, engaging in a summit with global leaders. The outcome: preliminary trade agreements with Malaysia, Cambodia, Thailand, and Vietnam. These developments spark speculation about a broader strategy shift amidst ongoing U.S.-China negotiations.

Here’s a breakdown:

• The agreements involve the four Asian nations committing to reduce trade barriers, prioritize market access for U.S. goods, and increase their procurement of American products. The economic impact hinges on specific implementation details and the scale of increased purchases.
• Crucially, the U.S. is slated to maintain existing tariff levels: 19% on most goods from Malaysia, Cambodia, and Thailand, and 20% on most Vietnamese goods, according to White House statements. This raises questions about the true extent of concessions being offered and the long-term trade balance.
• High-ranking U.S. and Chinese officials convened to establish a framework for potential discussions between President Trump and President Xi Jinping, tentatively scheduled for later this week in South Korea.
• Treasury Secretary Scott Bessent suggested that the threatened 100% tariff on Chinese goods, initially slated for November 1, is “effectively off the table,” signaling a potential softening of the U.S. stance. However, this relies heavily on China’s demonstrated commitment to addressing U.S. concerns on intellectual property and market access.
• Bessent also expressed optimism that China will postpone its planned rare earth export controls as part of any final agreement. The rare earth element market saw a correction overnight, with shares of associated companies declining. The U.S. strategic reliance on rare earths highlights the importance of this concession. Investors should monitor geopolitical factors affecting supply chain dependencies.
• President Trump, speaking aboard Air Force One, voiced confidence that he and President Xi will “come away with the deal,” setting an optimistic tone. The markets, however, remain cautiously optimistic, awaiting concrete details of any agreement.
• The recent trade activity follows the imposition of an additional 10% tariff on Canada, ostensibly triggered by an advertisement featuring the voice of former President Ronald Reagan. This seemingly retaliatory measure underscores the administration’s willingness to leverage tariffs for even minor disputes. Ontario Premier Doug Ford opted to halt the ad after it aired during the World Series.
• Despite these trade uncertainties, major indexes managed to reach record highs last week, indicating a degree of market resilience.

While the artificial intelligence sector continues to generate excitement among investors and tech companies, its economic benefits are being felt unevenly across the broader economy, according to recent analysis.

Small businesses are struggling with tariff-induced cost increases and concerns about consumer spending. Data from JPMorgan suggest that capital expenditures related to AI are now a more significant driver of economic growth than consumer spending, revealing a possible divergence in economic drivers. This shift may present concerns if AI-driven growth does not translate into increased opportunities for small businesses and the wider consumer economy.

OpenAI’s massive spending is transforming the shape of the economy, specifically regarding AI. This may come up as a significant point during Big Tech earnings reports this week.

Novartis announced its intention to acquire Avidity Biosciences for approximately $12 billion in cash. The acquisition provides Novartis with a key foothold in the rapidly growing RNA therapeutics space. The appeal of Avidity lies in its proprietary Antibody-Oligonucleotide Conjugates (AOCs) platform, delivering RNA therapies to previously inaccessible tissues.

The deal, expected to close in the first half of next year, entails Avidity spinning off certain segments of its existing business before integration with Novartis. This strategic move allows Novartis to bolster its research and development capabilities, with a growing emphasis on innovative drug delivery technologies.

Avidity investors are poised to receive $72 per share, a substantial 46% premium over the company’s closing price last week, reflecting investor confidence in the long-term strategic value of the acquisition. The acquisition also shows the larger trend of big Pharma buying up biotech companies as a way of increasing portfolio and future revenue opportunities.

American Airlines is currently underperforming its competitors. While some metrics position it behind key rivals, the airline’s leadership is betting on a strategy focused on investments to improve the bottom line in the long term.

The central question is whether American Airlines can deliver higher returns through a large expenditure on fleet modernization, cabin enhancements, and technological upgrades. Initial indications are positive. Following the release of positive earnings numbers last week, American Airlines stock jumped upward. However, the stock is still considerably down on the year.

Yum! Brands’ Taco Bell is aggressively pursuing a broader beverage strategy, aiming to diversify beyond its popular Baja Blast offering.

The company is implementing “Live Más Cafés”, which integrate traditional Taco Bell storefronts with coffee shop offerings. The chain expects to have 30 Live Más Cafés operating throughout California and Texas before the end of the year.

This initiative is a critical component of Taco Bell’s ambitious plan to generate $5 billion in drink sales by 2030, signaling a growing commitment to creating a bigger position within the beverage market.

Here are key events and data points to watch this week. Note that the ongoing government shutdown may delay the release of some economic data.

• Tuesday: PayPal, UPS, JetBlue, Royal Caribbean, and Wayfair earnings (before the bell); Case-Shiller housing index; Consumer confidence reading
• Wednesday: CVS and Boeing earnings (before the bell); Alphabet, Meta Platforms, Microsoft, Starbucks, Chipotle, and Carvana earnings (after the bell); Federal Reserve interest rate decision (Markets widely expect the Fed to hold rates steady but are keenly focused on the accompanying statement and press conference for clues about future policy.)
• Thursday: Restaurants Brands International, Merck, Eli Lilly, Comcast, Roblox, and Fox Corp. earnings (before the bell); Apple, Amazon, Reddit, and Cloudflare earnings (after the bell); Jobless claims; GDP data (Economists are closely watching GDP data for indications of economic slowdown amid concerns about inflation and potential recession.)
• Friday: PCE data; consumer spending data (PCE data is the Fed’s preferred inflation gauge, and any significant deviation from expectations could trigger market volatility.)

CNBC Pro subscribers can see a full calendar and rundown for the week.

Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC. Versant would become the new parent company of CNBC upon Comcast’s planned spinoff of Versant.

— CNBC’s Anniek Bao, Sam Meredith, Ashley Capoot, Kif Leswing, Liz Napolitano, Sean Conlon, Dan Mangan, Kevin Breuninger, Leslie Josephs and Amelia Lucas contributed to this report. Josephine Rozzelle edited this edition.