Wall Street futures were largely flat on Tuesday as investors kept a close watch on the ongoing U.S.-China trade negotiations, hoping for a breakthrough that might ease months of economic strain. After initial optimism from a preliminary Geneva agreement, fresh concerns emerged when Washington accused Beijing of blocking key exports critical to industries such as aerospace, autos, semiconductors, and defense.
The stakes in the talks are high. White House economic adviser Kevin Hassett signaled possible progress, suggesting the U.S. might lift some semiconductor export controls in exchange for faster Chinese deliveries of rare earth minerals. Market analysts, like Richard Hunter of Interactive Investor, viewed the temporary halt in tariff hostilities as a constructive move that could lead to broader easing of trade tensions between the world’s two largest economies.
Despite the cautious mood on Tuesday, the broader market showed resilience last month. The S&P 500 and Nasdaq posted their strongest monthly gains since November 2023, buoyed by strong corporate earnings and a softer tone from President Trump on trade. However, both indexes remain slightly below their respective all-time highs, keeping investors on edge about the direction of upcoming policy and economic data.
Attention is now turning to the U.S. consumer price index (CPI) report due Wednesday, which could influence the Federal Reserve’s upcoming decisions. While the Fed is widely expected to hold interest rates steady in its next meeting, any signs of rising inflation—possibly spurred by tariffs—could shift expectations. Currently, markets are pricing in a strong chance of two rate cuts before the year ends.
Elsewhere, the health sector saw turbulence as vaccine-maker stocks dipped following news that Health Secretary Robert F. Kennedy Jr. removed all 17 members of the CDC’s vaccine advisory panel. The unexpected shake-up has added another layer of uncertainty to markets already grappling with geopolitical and economic headwinds.
Source: Reuters