S&P 500 and Nasdaq futures rose on Wednesday, recovering from the previous session’s losses as investors awaited crucial economic numbers and U.S. President Donald Trump’s China visit, even as hope for a lasting peace deal with Iran dimmed.
Talks between the two sides have hit a stalemate. Trump said ahead of the high-stakes summit in Beijing that he did not expect to ask Chinese President Xi Jinping to help resolve the conflict with Tehran.
He also said he would press Xi to “open up” China to U.S. businesses and added Nvidia CEO Jensen Huang to a delegation of corporate leaders traveling with him. The world’s two largest economies are also considering extending a truce on Chinese rare earth export curbs.
Meanwhile, oil prices fell on the day, snapping a three-session rally and offering markets some relief.
Investors remain wary that a prolonged conflict could keep energy prices elevated, adding to inflationary pressures and muddying the U.S. Federal Reserve’s policy outlook.
Markets are also bracing for a potentially more hawkish central bank under Kevin Warsh, whom the Senate confirmed to the board on Tuesday and could move to approve as chair as soon as Wednesday. Jerome Powell’s term ends on Friday.
At 05:35 a.m. ET, Dow E-minis fell 149 points, or 0.3 per cent, S&P 500 E-minis rose 16.75 points, or 0.23 per cent, and Nasdaq 100 E-minis gained 239.75 points, or 0.82 per cent.
The S&P 500 and the Nasdaq Composite eased from record highs on Tuesday after U.S. consumer inflation posted its sharpest increase in three years in April.
Markets have largely priced out a Fed rate cut this year, while the probability of at least a 25-basis-point hike at the December meeting has climbed to more than 28 per cent, from below 22 per cent earlier in the week, according to CME’s FedWatch Tool.
Producer price data is due at 8:30 a.m. ET and investors will be watching for signs of building input cost pressures.
Retail sales figures later in the week will also be scrutinized for evidence that higher gasoline and energy costs are starting to squeeze other areas of consumer spending.
A chip-stock selloff that weighed on markets in the previous session appeared to stabilize on Wednesday, with memory-chip makers leading the recovery.
Micron Technology jumped 6.2 per cent, Western Digital rose 3.1 per cent, Seagate gained 2.8 per cent and SanDisk climbed 5.3 per cent in premarket trading.
Global shares traded mixed Wednesday, as fading enthusiasm over AI and other technology stocks gradually put the brakes on Wall Street’s record-setting run.
France’s CAC 40 was little changed, inching down less than 0.1 per cent in early trading to 7,975.77, while the German DAX added 0.8 per cent to 24,153.10. Britain’s FTSE 100 gained 0.4 per cent to 10,308.30.
In Asia, Japan’s benchmark Nikkei 225 edged up 0.8 per cent to finish at 63,272.11.
South Korea’s Kospi index surged 2.6 per cent to 7,844.01, recouping recent losses. The Kospi sank 2.3 per cent earlier in the week from an all-time high after a senior figure in the administration suggested the government may redistribute windfall AI profits from companies to citizens. Analysts said some investors were snatching the shares that got sold as the actual impact of the remarks was still unclear.
Australia’s S&P/ASX 200 lost 0.5 per cent to 8,630.40. The Hang Seng gained 0.2 per cent to 26,388.44, while the Shanghai Composite rose 0.7 per cent to 4,242.57.
“Corporate earnings and AI momentum are acting as the market’s primary shock absorbers, but the road is getting significantly rougher,” said Tim Waterer, chief market analyst at KCM Trade.
“With oil prices becoming entrenched at elevated levels and a diplomatic breakthrough between the U.S. and Iran remaining elusive, the easy bullish narrative is becoming much harder to maintain.”
In energy trading, benchmark U.S. crude fell US$1.30 to US$100.88 a barrel. Brent crude lost US$1.33 to US$106.44 a barrel.
Those prices are still way above what they were before the war with Iran, which threatens to drag on, the ceasefire looking more tenuous. Brent has surged from roughly US$70 per barrel before the war. The war has essentially shut the Strait of Hormuz to oil tankers.
In currency trading, the U.S. dollar rose to 157.83 Japanese yen from 157.59 yen. The euro cost US$1.1704, down from US$1.1744.
The Associated Press