The outlines of this optimism are telling. The United States and China, locked for years in a tariff spat, have apparently found common ground, if not reconciliation. Behind the headlines, negotiators spoke of easing rare earths controls and suspending steeper American tariffs. Trump will meet Xi Jinping later in the week, their summit promising more symbolism than substance. U.S.-listed shares of Chinese giants—Alibaba, JD.com, Baidu—surged, embodying a curious duality: global investors betting on the success of decoupling.

This is the new face of globalization, less open embrace, more managed coexistence. Even ANZ's cautionary note that this deal represents "managed decoupling" seemed to miss the point. In an era when volatility is a form of policy, half-measures can be the most stable outcome. The future, for now, is not about integration but about containment of tariffs, of inflation, of uncertainty itself.

The optimism was not confined to the Pacific. From Buenos Aires to Beijing, capital found new narratives. Argentine markets erupted in jubilation after Javier Milei's election victory, the libertarian president promising a "free-market revolution" under the approving gaze of Donald Trump. In China, industrial profits surged more than 21%.

However, the Federal Reserve, expected to cut rates this week, faces a paradox of its own making: each easing stokes the very exuberance it seeks to temper. Bond yields rose as investors priced in not only Wednesday's expected cut but two more by year's end. The economy, far from faltering, risks reaccelerating.

Also over the weekend, Donald Trump also had a meeting with the Emir and Prime Minister aboard Air Force One. On Sunday, he arrived in Malaysia and sponsored of a peace accord between Thailand and Cambodia, signed trade deals with Cambodia, Thailand, and Malaysia, and mineral agreements with the latter two. Then, attendance at the ASEAN summit and a meeting with Brazil's president, Lula.

Other events this week include the Fed meeting and the earnings reports of the major American tech firms—both key drivers of recent market gains. US indices closed at fresh records on Friday.

Indeed, this year's market rally has been underpinned primarily by the AI theme. This week will be a real test, with Amazon, Alphabet, Meta and Microsoft all reporting results. Investors are still wondering whether the hundreds of billions poured into AI will ever pay off. According to Bloomberg, capital expenditures at these four firms will reach $360 billion this year, and $420 billion by 2026.

Across Asia-Pacific, stock indices were sharply higher, tracking Wall Street's record close on Friday. In Japan, the Nikkei has reached a new all-time high, crossing the 50,000-point mark. European markets are also in the green.

Today's economic highlights:

On today's agenda: in Germany, the IFO business climate, IFO current assessment, and IFO expectations; in the United States, durable goods orders; the M3 money supply GA will also be monitored. See the full calendar here.

In corporate news:

  • Linde declared a quarterly dividend of $1.50 per share.
  • Lululemon partnered with the NFL and Fanatics to launch a new apparel collection featuring all 32 teams, marking its first official NFL collaboration.
  • Rare earth miners like MP Materials, NioCorp, and Critical Metals fell after the U.S. and China reached a trade truce potentially pausing tariffs and export controls.
  • Tesla chair warned CEO Elon Musk may leave if a $1 trillion pay package isn't approved, citing his importance to the company's AI and robotics ambitions.
  • Intellia Therapeutics paused two gene therapy trials after a participant suffered serious liver injury, causing shares to drop over 44%.
  • BridgeBio Pharma reported its Fortify Phase 3 study for BBP-418 met all endpoints, with plans to file for FDA approval in 2026.
  • Keurig Dr Pepper raised its annual sales forecast and secured $7 billion from Apollo and KKR to help fund its JDE Peet's acquisition.
  • Mazda formed a carbon credit pool with its Changan JV in the EU to avoid emissions fines, with the pool open to other manufacturers.
  • Bristol-Myers Squibb posted strong Phase 3 results for Sotyktu in psoriatic arthritis and lupus, reinforcing its efficacy and safety profile.
  • Albemarle agreed to sell control of its Ketjen unit and its Eurecat JV stake for $660 million to focus on lithium and bromine.
  • Amazon announced a €1.4 billion investment to expand its AWS and retail operations in the Netherlands over the next three years.
  • American Water will acquire Essential Utilities in an all-stock $63 billion deal, expanding its footprint to 17 states.
  • Perpetua Resources secured a $255 million investment from Agnico Eagle and JPMorgan to fund its Idaho mining project.
  • Eli Lilly reported that Omvoh significantly improved bowel urgency in ulcerative colitis patients, confirming long-term efficacy.
  • Cigna will end prescription drug rebates in many private plans by 2027, shifting to upfront discounts to cut costs.
  • Legal & General completed a £4.6 billion pension buy-in for Ford's UK schemes, securing benefits for over 35,000 retirees.
  • Revvity raised its annual profit forecast on renewed diagnostics demand, despite slightly missing revenue expectations.
  • Baker Hughes was selected by Technip Energies to supply critical technology for the Blue Point Number One project.
  • Huntington Bancshares will acquire Cadence Bank in a $7.4 billion all-stock deal, aiming for 10% earnings accretion.
  • Fermi America and Hyundai E&C signed a contract for nuclear power development on the world's largest private grid.
  • Lenskart targets an up to $8 billion IPO valuation, aiming to become the "Amazon of eyewear" across Asia.
  • Restaurant Brands International shortlisted CPE and HSG for a China stake deal.
  • TotalEnergies resumed its LNG project in Mozambique after halting it due to regional instability.
  • Novartis acquired Avidity Biosciences for $12 billion to enhance its neuroscience pipeline.
  • Resurs Holding will delist from Nasdaq Stockholm after Ronneby UK acquired over 90% of its shares.
  • Microsoft faces legal action in Australia over allegations of misleading pricing and anti-competitive behavior.
  • Boeing faces prolonged strikes as defense workers reject contract offers.

Analyst Recommendations:

  • Doordash, Inc.: Goldman Sachs initiates coverage with a buy rating and a target price of USD 315.
  • Eastgroup Properties, Inc.: BNP Paribas Exane upgrades to outperform from neutral with a price target raised from USD 180 to USD 207.
  • Five Below, Inc.: JP Morgan upgrades to overweight from neutral with a price target raised from USD 154 to USD 186.
  • Honeywell International Inc.: RBC Capital upgrades to outperform from sector perform and raises the target price from USD 235 to USD 253.
  • Intuitive Surgical, Inc.: William O'Neil & Co Incorporated initiates coverage with a buy recommendation.
  • Microsoft Corporation: Guggenheim upgrades to buy from neutral with a target price of USD 586.
  • Roper Technologies, Inc.: RBC Capital downgrades to sector perform from outperform and reduces the target price from USD 644 to USD 539.
  • Thor Industries, Inc.: Raymond James upgrades to market perform from underperform.
  • Amkor Technology, Inc.: Morgan Stanley maintains its equal weight recommendation and raises the target price from USD 20 to USD 28.
  • Apa Corporation: Evercore ISI maintains its in-line recommendation and raises the target price from USD 16 to USD 21.
  • Bath & Body Works, Inc.: Wells Fargo maintains its overweight recommendation and reduces the target price from USD 44 to USD 33.
  • Booz Allen Hamilton Holding Corporation: JP Morgan maintains its underweight recommendation and reduces the target price from USD 122 to USD 90.
  • Brunswick Corporation: Morgan Stanley maintains its market weight recommendation and raises the target price from USD 51 to USD 72.
  • Ford Motor Company: Citi maintains its neutral recommendation and raises the target price from USD 11 to USD 13.50.
  • General Motors Company: CICC maintains its outperform recommendation and raises the target price from USD 60 to USD 80.
  • Intel Corporation: CITIC Securities Co Ltd maintains its hold recommendation and raises the target price from USD 25 to USD 38.90.
  • Lam Research Corporation: CITIC Securities Co Ltd maintains its buy recommendation and raises the target price from USD 113 to USD 165.
  • Tesla, Inc.: Guotai Haitong Securities maintains its overweight recommendation and raises the target price from USD 354 to USD 518.
  • Wayfair Inc.: JP Morgan maintains its overweight recommendation and raises the target price from USD 82 to USD 105.