The S&P 500 and the Nasdaq opened at record highs, while the Dow was on the cusp of that as optimism from a U.S.-EU trade pact set the stage for a week packed with megacap earnings, a Fed meeting, and an approaching U.S. tariff deadline.

At 9:39 a.m ET, Dow fell 0.10%, to 44,855.92. The blue-chip index was about 215 points away from its December 4 record high.

The S&P 500 rose 0.08% and the Nasdaq Composite gained 0.28%.

President Donald Trump and European Commission President Ursula von der Leyen unveiled a trade framework on Sunday, slashing EU import tariffs to 15%—half the previously threatened rate set for August 1.

The S&P 500 has gained more than 30% and the Nasdaq over 40% since their April lows.

Last week, a string of deals with major U.S. trade partners including Japan, Indonesia and the Philippines fueled robust gains on Wall Street.

But the market’s remarkable rally faces a crucial test in the days ahead, as “Magnificent Seven” heavyweights Meta, Microsoft, Amazon, and Apple prepare to report their earnings, potentially setting the tone for Wall Street.

Last week, Alphabet surprised Wall Street with a bold capital spending hike, reviving AI optimism, even as Tesla cast a shadow by warning of tough quarters ahead amid shrinking electric vehicle subsidies.

Tesla Rose 0.4% After Signing Source Chip Deal

Tesla rose 0.4% after the automaker signed a $16.5 billion deal to source chips from Samsung Electronics.

“This is about as busy as a week can get in the markets. This week could make or break that momentum in the near term. With four of the Magnificent Seven stocks reporting earnings, the tech sector has the potential to lead the market, either higher or lower,” said Chris Larkin, managing director, trading and investing, E*TRADE at Morgan Stanley.

The latest pact with the 27-member EU bloc has raised expectations that a global trade war could be averted, while other economies are scrambling to finalize agreements before the deadline.

The ongoing U.S.-China talks are expected to extend their fragile trade truce by another three months, while negotiations with India were still underway.

A key highlight of the week will be the Fed’s two-day policy meeting starting Tuesday, with traders widely expecting the central bank to keep interest rates steady. As per the CME Group’s FedWatch tool, odds for a September cut stand at 63%.

The meeting comes amid an aggressive campaign by the White House to pressure the Fed into lowering borrowing costs. Trump on Friday suggested Powell might be ready to lower interest rates.

Among a deluge of key economic indicators this week, attention will be on the Personal Consumption Expenditure report (PCE) – the Fed’s preferred inflation measure – and non-farm payrolls data to gauge how tariffs have affected consumer prices and the labor market.

Ether-linked companies GameSquare and BTCS were up 4% each after Ethereum prices hit over a seven-month high.

Nike rose 2.1% after J.P. Morgan upgraded the stock to “overweight” from “neutral” and said investors should “just buy it”.

Declining issues outnumbered advancers by a 1.23-to-1 ratio on the NYSE, while advancing issues outnumbered decliners by a 1.08-to-1 ratio on the Nasdaq.

The S&P 500 posted 13 new 52-week highs and one new low, while the Nasdaq Composite recorded 34 new highs and 21 new lows.

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(Reporting by Nikhil Sharma and Pranav Kashyap in Bengaluru; Editing by Maju Samuel)