U.S. stock futures indicate a modest gain for Wednesday’s open as investors look to bounce back following a mostly flat and volatile session on Tuesday.
Market sentiment is buoyed by reports that the U.S. and European Union are closing in on a trade agreement, potentially involving tariffs higher than those applied to the U.K.
The Financial Times revealed that EU negotiators are nearing a deal with the U.S. that would lock in these elevated tariffs.
Still, early trading might be cautious after President Donald Trump announced a 50% tariff on copper imports and threatened tariffs as high as 200% on pharmaceutical products.
Trump posted on Truth Social late Tuesday: he will “be releasing a minimum of 7 Countries having to do with trade” this morning, with “an additional number of Countries being released in the afternoon.”
All eyes will also be on the Federal Reserve’s release of minutes from its latest policy meeting later today.
Investors hope these minutes will provide clues about the Fed’s interest rate plans before the next meeting scheduled for July 29-30.
Currently, CME Group’s FedWatch Tool assigns a 93.3% chance the Fed will hold rates steady this month.
After a steep sell-off on Monday, the major indexes lacked clear direction on Tuesday, moving around the unchanged mark before finishing mixed.
The Nasdaq edged up 5.95 points, less than 0.1%, closing at 20,418.46; the S&P 500 dipped 4.46 points (0.1%) to 6,225.52; and the Dow fell 165.60 points (0.4%) to 44,240.76.
Investor caution stems from uncertainty surrounding Trump’s trade policies.
On Monday, Trump signed an executive order extending the suspension of reciprocal tariffs on U.S. trade partners.
The 90-day suspension, initially due to expire Wednesday, has been extended until August 1, citing “additional information and recommendations from various senior officials.”
Trump commented to reporters the extension is “not 100 percent firm,” but his Truth Social post this morning stated “No extensions will be granted,” fueling uncertainty.
This extension follows Trump’s recent letters posted on Truth Social, threatening increased tariffs on at least fourteen countries.
With no major U.S. economic releases expected before the Fed minutes, some traders remained sidelined.
Energy stocks outperformed, with the Philadelphia Oil Service Index surging 5.3% and the NYSE Arca Oil Index up 3.4%.
Semiconductor shares also rallied, reflected by the Philadelphia Semiconductor Index’s 1.8% gain.
Biotech and steel stocks showed strength, while gold stocks slid sharply in line with lower precious metal prices.
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