New York, Jul 28 (AP) US stock indexes are drifting on Monday after the United States agreed to tax cars and other products coming from the European Union at a 15 per cent rate, lower than President Donald Trump had earlier threatened. Many details are still to be worked out, though, and Wall Street is heading into a week full of potential flashpoints that could shake markets.

The S&P 500 was virtually unchanged in midday trading after setting an all-time high every day last week. The Dow Jones Industrial Average was down 8 points, or less than 0.1 per cent, as of 11:30 am Eastern time, and the Nasdaq composite was 0.2 per cent higher, coming off its own record.

Tesla added 3.5 per cent after its CEO, Elon Musk, said it signed a deal with Samsung Electronics that could be worth more than USD16.5 billion to provide chips for the electric-vehicle company. Samsung's stock in South Korea jumped 6.8 per cent.

Other companies in the chip and artificial-intelligence industries were strong, continuing their run from last week after Alphabet said it was increasing its spending on AI chips and other investments by USD10 billion to USD85 billion this year. Chip company Advanced Micro Devices rose 3.7 per cent, and server-maker Super Micro Computer climbed 6.7 per cent.

They helped offset a 9.7 per cent drop for Revvity. The company in the life sciences and diagnostics businesses reported a stronger profit for the latest quarter than Wall Street expected, but it also gave a forecasted range for profit over the full year whose midpoint fell below analysts' estimates.

Companies are broadly under pressure to deliver solid growth in profits following big jumps in their stock prices the last few months. Much of the gain was due to hopes that Trump would walk back some of his stiff proposed tariffs, and critics say the broad US stock market looks expensive unless companies produce bigger profits to justify the moves.

Many more fireworks may be ahead this week. “This is about as busy as a week can get in the markets,” according to Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.

Hundreds of US companies are lined up to report how much profit they made during the spring, with nearly a third of all the businesses in the S&P 500 index scheduled to deliver updates. That includes market heavyweights Apple, Amazon, Meta Platforms and Microsoft. Those companies have grown so huge that their stock movements can almost solely dictate what the overall S&P 500 index does. Microsoft alone is worth roughly USD 3.8 trillion, On Wednesday, the Federal Reserve will announce its latest decision on interest rates.

Trump has been loudly and angrily calling for the Fed to cut interest rates, a move that could give the economy a boost. But Fed Chair Jerome Powell has been insisting that he wants to wait for more data about how Trump's tariffs are affecting the economy and inflation before the Fed makes its next move. Lower interest rates can give inflation more fuel, and the economy only recently came out of its scarring run where inflation briefly topped 9 per cent.

The widespread expectation on Wall Street is that Fed officials will wait until September to resume cutting interest rates, though a couple of Trump's appointees could dissent in the vote. The Fed has been on hold with interest rates this year since cutting them several times at the end of 2024.

This week will also feature several potentially market-moving updates about the economy. On Tuesday will come reports on how confident US consumers are feeling and how many jobs openings US employers were advertising. Wednesday will show the first estimate of how quickly the US economy grew during the spring, and economists expect to see a slowdown from the first three months of the year.

On Thursday, the latest measure of inflation that the Federal Reserve prefers to use will arrive. A modest reading could give the Fed more leeway to cut interest rates in the short term, while a hotter-than-expected figure could make it more cautious.

And Friday will bring an update on how many more workers US employers hired during June than they fired.

Treasury yields held relatively steady in the bond market ahead of all that action. The yield on the 10-year Treasury edged up to 4.41 per cent from 4.40 per cent late Friday. The two-year Treasury yield, which more closely tracks expectations for Fed action, rose to 3.93 per cent from 3.91 per cent.

In stock markets abroad, indexes dipped in Europe following the announcement of the trade deal's framework.

Chinese stocks rose as officials from the world's second-largest economy prepared to meet with a US delegation in Sweden for trade talks. Stocks climbed 0.7 per cent in Hong Kong and 0.1 per cent in Shanghai.

Indexes were mixed across the rest of Asia, where Japan's Nikkei 225 fell 1.1 per cent for one of the world's bigger losses. (AP) RD RD