U.S. stocks bounced back on Wednesday after two days of losses, as investors digested the latest developments in global trade negotiations and anticipated the release of minutes from the Federal Reserve’s most recent meeting.
As of 05:35 ET, the Dow Jones Industrial Average climbed 200 points (0.5%), the S&P 500 rose 30 points (0.5%), and NASDAQ 100 futures advanced by 145 points (0.7%).
Trump Targets Copper in New Tariff Threats
Markets opened the week on a weaker note after President Donald Trump sent letters to several major trading partners outlining new tariff plans. However, he postponed the start date for these tariffs to August 1, pushed back from the original July 9.
At a cabinet meeting Tuesday, Trump emphasized that the August deadline would be final, despite earlier uncertainty. He noted progress in trade talks with both the European Union and China, although he warned that the EU would soon receive its own tariff letter.
EU officials are working toward a trade deal with the U.S. but face difficulties securing immediate tariff relief and safeguarding against additional trade measures. Bernd Lange, head of the European Parliament’s trade committee, addressed the challenge on Wednesday.
Trump also floated the idea of imposing a 50% tariff on imported copper, signaling that his trade policy extends beyond countries to specific industries. Copper, vital for manufacturing sectors such as automotive, defense, and power infrastructure, could be particularly impacted. The president hinted that other sectors, including pharmaceuticals and semiconductors, may also be targeted.
Meanwhile, Treasury Secretary Scott Bessent claimed that tariffs have already generated $100 billion in revenue this year and could bring in up to $300 billion by year-end. Most of this revenue came after the second quarter, when Trump implemented a base 10% duty and raised tariffs on steel, aluminum, and cars.
Markets Eye Fed Minutes for Rate Guidance
Investors are also awaiting the release of minutes from the Federal Reserve’s June meeting, which could shed light on the central bank’s future approach to interest rates.
At that meeting, the Fed held rates steady in the 4.25%–4.5% range, opting for a cautious stance while evaluating the broader impact of Trump’s trade policies. Strong job numbers last week further lowered expectations of an imminent rate cut.
On Tuesday, Trump renewed his criticism of Fed Chair Jerome Powell, advocating for lower rates. He also cited a Council of Economic Advisers report that claimed tariffs had not yet triggered inflation.
According to The Wall Street Journal, Kevin Hassett, one of Trump’s top economic advisers, is now considered a serious contender to replace Powell as Fed Chair, overtaking previous frontrunner Kevin Warsh, a former Fed governor.
Goldman Sachs: Limited Short-Term Upside for Stocks
Strategists at Goldman Sachs believe stock markets face limited short-term gains due to high valuations and deteriorating economic fundamentals.
Led by Christian Mueller-Glissmann, the team remains neutral on equities over the next three months but holds a bullish view over 12 months, supported by long-term growth drivers, easing fiscal and monetary policy, corporate restructuring, and strong shareholder returns.
They warned, however, that the market is more likely to experience a pullback than a major rally in the near term, especially given weakening inflation outside the U.S.
Oil Prices Edge Down as Inventories Rise
Oil prices dipped following data showing a surprising increase in U.S. crude inventories, raising concerns that tariffs could dampen energy demand.
As of 09:35 ET, Brent crude fell 0.6% to $69.76 per barrel, while West Texas Intermediate (WTI) dropped 0.8% to $67.77.
Both benchmarks had hit two-week highs Tuesday amid worries over supply disruptions from Houthi attacks in the Red Sea.
The American Petroleum Institute reported an unexpected 7.1 million-barrel build in U.S. crude inventories for the week ending July 4, far exceeding forecasts of a 2.8 million-barrel decline.
Investors now await confirmation from the Energy Information Administration (EIA), especially as travel tends to spike around the Independence Day weekend.
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