U.S. stock index futures point to a higher open on Wednesday, building on gains from the previous session, following encouraging inflation data and renewed optimism surrounding U.S.-China trade negotiations.
Inflation Data Comes In Softer Than Expected
Futures advanced after the Labor Department reported that consumer prices rose slightly less than anticipated in May. The Consumer Price Index (CPI) edged up by 0.1% for the month, following a 0.2% increase in April. Economists had projected another 0.2% rise.
On an annual basis, CPI growth accelerated to 2.4% in May, up from 2.3% in April but below the expected 2.5%.
Core CPI, which excludes food and energy, also rose by 0.1% in May, after a 0.2% gain the prior month. The core inflation rate remained steady year-over-year at 2.8%, falling short of forecasts for a rise to 2.9%.
Trade Developments Lift Sentiment
Wall Street’s positive tone was also supported by progress in U.S.-China trade talks. Officials from both countries reached a preliminary agreement aimed at easing trade tensions, though details remain limited. U.S. Commerce Secretary Howard Lutnick stated the deal awaits final approval from Presidents Donald Trump and Xi Jinping.
Lutnick suggested the agreement includes the lifting of certain export controls. In a Truth Social post, Trump claimed China will supply essential rare earth materials under the new framework and added, “WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%,” while describing the relationship as “excellent.”
Tuesday Recap
Stocks closed modestly higher on Tuesday as investors awaited further news from the London trade talks. The Dow rose 105.11 points (0.3%) to 42,866.87, while the Nasdaq climbed 123.75 points (0.6%) to 19,714.99. The S&P 500 added 32.93 points (0.6%) to close at 6,038.81.
Business Sentiment Improves
On the economic front, the NFIB Small Business Optimism Index rose to 98.8 in May—its highest level in three months—up from 95.8 in April and beating expectations of 95.9.
Traders remain cautious ahead of upcoming data on consumer and producer price inflation.
Upcoming U.S. Reports
Later today, the Energy Information Administration will release crude oil inventory figures for the week ending June 6. Inventories are expected to rise by 0.1 million barrels following a 4.3 million-barrel decline the previous week.
At 1 p.m. ET, the Treasury Department will auction $39 billion in 10-year notes.
Global Markets Overview
Europe
European markets traded slightly higher Wednesday amid positive developments in U.S.-China relations. The DAX in Germany rose 0.5%, the FTSE 100 in the U.K. gained 0.3%, and France’s CAC 40 added 0.1%.
Investor sentiment was lifted by news of a potential framework deal to relax rare earth and technology export restrictions.
British homebuilders gained ahead of a public spending announcement by the U.K. finance minister. However, Ibstock plunged nearly 14% on margin pressure warnings, despite higher sales. Inditex (Zara’s parent) fell 4.3% after missing Q1 sales estimates. In contrast, engineering firm Ricardo soared 25% on news of a £281 million acquisition by Canada’s WSP Global.
Asia
Asian stocks advanced on Wednesday as trade optimism buoyed investor sentiment, although gains were tempered by caution ahead of U.S. inflation data.
China’s Shanghai Composite climbed 0.5% to 3,402.32, supported by automaker gains after pledges to shorten supplier payment terms. Hong Kong’s Hang Seng rose 0.8% to 24,366.94, led by EV and tech shares.
Japan’s Nikkei 225 added 0.6% to 38,421.19, with the broader Topix Index inching up to 2,788.72. The rally came after data showed a slowdown in wholesale inflation, reducing pressure on the Bank of Japan to hike rates.
In South Korea, the Kospi surged 1.2% to 2,907.04, its highest since January 2022, on tax reform pledges from President Lee Jae-myung and steady unemployment figures. Major gainers included SK Hynix (+4.1%) and Hyundai Mobis (+4.9%).
Australian markets ended slightly higher at a four-month high, supported by gains in real estate, mining, and energy sectors. New Zealand’s S&P/NZX-50 Index rose 0.3% to 12,605.93.
Commodities & Currencies
Crude oil futures rose $1.09 to $66.07 a barrel after slipping $0.31 on Tuesday. Gold prices jumped $37.90 to $3,381.30 an ounce, recovering from an $11.50 drop in the previous session.
On the currency front, the U.S. dollar weakened to 144.51 yen from 144.87 yen. Against the euro, the dollar is trading at $1.1470, up from $1.1425 on Tuesday.