The major U.S. index futures on the Dow Jones, S&P and Nasdaq are currently pointing to a roughly flat open on Tuesday, with stocks likely to show a lack of direction after recovering from initial weakness to end the previous session mostly higher.
Traders may be reluctant to make significant moves as they await further developments on the trade front a month ahead of the expiration of President Donald Trump’s 90-day tariff pause.
While tensions between the U.S. and China have seemingly risen in recent days, traders appear to remain generally optimistic about trade deals being reached.
“The 90-day pause on tariffs has just over a month before expiration, meaning the pressure is on countries to do deals with the Trump administration,” said Russ Mould, investment director at AJ Bell.
He added, “Reports suggest that Trump wants best offers on trade negotiations by Wednesday, perhaps to avoid any last-minute rush or stalemate situations.”
Meanwhile, the Organization for Economic Co-operation and Development has lowered its global growth forecast for 2025 to 2.9 percent from 3.1 percent.
The Paris-based firm said the outlook across the globe has become challenging due to rising trade barriers and policy uncertainty, which is weighing on consumer confidence and blocking investments.
Stocks came under pressure early in the session on Monday but showed a notable turnaround over the course of the trading day. The major averages climbed well off their lows of the session and into positive territory.
The major averages saw further upside going into the end of the day, reaching new highs for the session. The Nasdaq climbed 128.85 points or 0.7 percent at 19,242.61, the S&P 500 rose 24.25 points or 0.4 percent to 5,935.94 and the Dow inched up 35.41 points or 0.1 percent to 42,305.38.
The early weakness on Wall Street partly reflected renewed trade concerns amid further signs of rising tensions between the U.S. and China.
China on Monday pushed back against President Donald Trump’s claims that it had broken the Geneva trade agreement, accusing the U.S. of violating the deal with increased tech export restrictions and the revocation of Chinese student visas.
“These practices seriously violate the consensus reached by the two heads of state on January 17, seriously undermine the existing consensus of the Geneva economic and trade talks, and seriously damage China’s legitimate rights and interests,” a Chinese Ministry of Commerce spokesperson said.
A collapse of the U.S.-China trade agreement could lead to considerable weakness among stocks, which have shown a considerable recovery since Trump’s “reciprocal tariff” announcement in early April.
The Trump administration has also announced it will double the current tariff rate on steel and aluminum imports from 25 percent to 50 percent.
However, selling pressure waned following the release of a report from the Institute for Supply Management showing its reading on U.S. manufacturing activity unexpectedly edged slightly lower in the month of May.
The ISM said its manufacturing PMI slipped to 48.5 in May from 48.7 in April, with a reading below 50 indicating contraction. Economists had expected the index to inch up to 49.5.
With the unexpected decline, the manufacturing PMI dipped to its lowest level hitting 48.4 in November 2024.
The report may have generated some optimism about the outlook for interest rates amid signs of U.S. economic weakness due to Trump’s trade war.
The turnaround on Wall Street also came after a White House official told CNBC that Trump and Chinese President Xi Jinping could speak one-on-one “very soon.”
Gold stocks moved sharply higher along with the price of the precious metal, with the NYSE Arca Gold Bugs Index soaring by 6.0 percent.
Trump’s increased tariffs on U.S. steel imports also contributed to substantial strength among steel stocks, as reflected by the 3.0 percent surge by the NYSE Arca Steel Index.
Semiconductor, natural gas and oil service stocks also moved notably higher over the course of the session, while some weakness remained visible among housing stocks.
Dow Jones, S&P, Nasdaq, Futures Pointing To Roughly Flat Open On Wall Street
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