U.S. Stock Futures Steady After Early Week Surge Amid Trade Optimism, Fed in Focus

After a strong start to the week driven by positive economic signals, U.S. stock futures held steady early Wednesday as investors awaited further trade developments and Federal Reserve commentary. Futures for the Dow Jones Industrial Average ticked up 0.1%, while the S&P 500 and Nasdaq futures nudged slightly higher by 0.04% and 0.02%, respectively. This pause in momentum comes after Wall Street rallied on news of easing U.S.-China tariffs and softer inflation data, which helped restore some investor confidence.

The improved market sentiment stems from a weekend agreement between Washington and Beijing to temporarily scale back steep tariffs. U.S. duties on Chinese imports were lowered from 145% to 30%, while China reduced its own tariffs on American goods from 125% to 10%, both for a 90-day period. These adjustments, along with a recent limited trade agreement between the U.S. and the UK, are seen as an attempt to ease pressure on global markets and avert a potential economic downturn.

Stock indexes have responded positively to these trade shifts. The S&P 500 turned positive on a year-to-date basis for the first time since February, and both the S&P and Nasdaq have recovered to levels seen before the U.S. announced sweeping new tariffs in early April. Investors are now watching President Trump’s four-day trip through the Gulf, including a meeting with Syria’s president in Saudi Arabia, for any new trade announcements.

Tuesday’s market gains were also fueled by fresh inflation data showing a moderate rebound in consumer prices for April. The Consumer Price Index (CPI) rose 0.2%, slightly under expectations, and analysts noted that new tariffs hadn’t yet significantly impacted consumer costs. This has reinforced market expectations of at least two interest rate cuts by the Federal Reserve before the end of the year, with the first potentially arriving in September.

Looking ahead, investors are focusing on a lineup of Federal Reserve speakers, including Governor Christopher Waller on Wednesday and Chair Jerome Powell on Thursday. Meanwhile, Tesla and Nvidia led the premarket gainers among major tech stocks, both up nearly 2%. Conversely, American Eagle Outfitters tumbled over 13% after it pulled its annual forecast due to tariff-related uncertainty. With over 90% of S&P 500 companies having reported earnings, eyes are now on Walmart’s results later this week.

Source: Reuters