Trump slaps 30% tariffs on EU, Mexico
Stocktwits - U.S. stock futures point to a modestly lower opening by Wall Street stocks on Wednesday as traders hit the pause button after the S&P 500 Index advanced for a third straight session.
News out of the London suggested progress in the U.S. and China trade talks. However, a lack of optimism over the talks may have been due to the market having already factored in such an outcome.
The imminent release of the consumer price inflation (CPI) data ahead of next week’s Federal Reserve’s rate-setting meeting has also introduced caution.
As of 11:19 p.m. ET on Tuesday, the Dow, S&P 500, and Nasdaq 100 futures were down over 0.25%, and the Russell 2000 futures slid 0.09%.
Crude oil futures fell modestly and traded below the $65-a-barrel mark, while gold futures advanced. The U.S. dollar extended its gain overnight, with the U.S. dollar Index, which tracks the greenback’s performance against a basket of major currencies, trading above 99.
The 10-year Treasury note yield continued to ease ahead of the May inflation report.
Among the key economic catalysts for the day is the Bureau of Labor Statistics CPI data, which is due at 8:30 a.m. ET. The monthly annual inflation rate is expected to be 0.2%, the same pace as in April, and the annual rate may have quickened slightly to 2.4% from 2.3%.
The core CPI is expected to rise 0.3% month-over-month, faster than the 0.2% rate in the previous month. Economists, on average, expect the annual core rate to tick up to 2.9% from May’s 2.8% pace.
The Treasury Department is scheduled to release its monthly federal budget for May at 2 p.m. ET. The consensus estimate calls for a slight deficit narrowing to $310 billion from a $347 billion deficit in April.
Oracle (NYSE:ORCL), Chewy (CHWY), SailPoint (SAIL (NSE:SAIL)), Victoria’s Secret (VSCO) and Oxford Industries (OXM) are among the earnings reports on traders’ radar on Wednesday.
Oracle’s earnings, due after the market close, are another barometer of spending on artificial intelligence (AI) — a technology that has played a significant role in the rally seen since 2023.
Fund Manager Louis Navellier wrote in a note to clients that tariffs and geopolitical risks appeared to be on investors’ back burners.
The strategist acknowledged the slowdown in the S&P 500 rebound but noted that there hasn’t been any nervous selling.
Naveller also weighed in on market drivers in the near term. He said, “The next shoe to drop will be the needed cuts by the Fed, which should be the next major stimulus to push the market to new highs.”
The market’s upward momentum looks set to continue on Wednesday as investors hope for a U.S.-China trade truce. All but industrial stocks ended the day in the green, with energy, communication services, consumer discretionary and real estate stocks seeing particular strength.
The Invesco QQQ Trust (QQQ) ETF and the SPDR S&P 500 ETF (SPY) added 0.66% and 0.57%, respectively.
The SPDR Dow Jones Industrial Average ETF Trust ( DIA (BME:DIDA)) gained 0.29%, while the iShares Russell 2000 ETF (IWM) ended 0.54% higher.
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