U.S. stock futures dipped as investors absorbed mixed inflation data and braced for more economic reports. Several major U.S. companies are gearing up to release their quarterly earnings, while European chip equipment maker ASML (EU:ASML) warned of potential headwinds from rising U.S. tariffs, putting its 2026 growth in question. On the trade front, President Donald Trump announced a new tariff deal with Indonesia ahead of an important August 1 deadline for his “reciprocal” tariffs.
Market Movements and Inflation Data
By early Wednesday, futures for the Dow, S&P 500, and Nasdaq all showed modest declines, reflecting investor caution. The previous trading session saw slight drops in major indexes amid concerns about rising prices for goods affected by tariffs. The latest inflation data appears to have cemented expectations that the Federal Reserve will hold interest rates steady at its upcoming meeting, escalating tensions between Trump and Fed Chair Jerome Powell, whom Trump has criticized for not cutting rates more aggressively.
Early bank earnings revealed mixed results. JPMorgan shares edged lower, Citigroup rose sharply, while Wells Fargo declined after lowering its earnings outlook for the year.
Details of the U.S.-Indonesia Trade Deal
The U.S. will impose a 19% tariff on imports from Indonesia, increasing from the current 10%, as part of a new bilateral trade agreement. The deal also targets “transshipping” practices, where Chinese goods are routed through Indonesia to bypass U.S. tariffs. This agreement follows earlier frameworks with the UK, China, and Vietnam. Trump stressed that the August 1 tariff deadline would not be postponed again, despite earlier market disruptions.
Yale Budget Lab estimates that the average U.S. tariff rate will rise to over 20% due to these policies, a sharp increase from pre-Trump levels.
ASML’s Earnings and Outlook
ASML reported strong second-quarter bookings but cautioned that growth in 2026 is uncertain due to challenging macroeconomic and geopolitical factors, especially tariffs. CEO Christophe Fourier said while growth is still planned, it cannot be guaranteed at this time. ASML shares fell more than 6% in early trading following the announcement.
Meanwhile, luxury goods maker Richemont saw a 6% increase in sales for the quarter, buoyed by jewellery demand despite softness in its watches segment.
Upcoming Earnings Reports
Wednesday’s earnings calendar includes major banks such as Bank of America, Morgan Stanley, and Goldman Sachs, offering clues about the financial sector’s outlook. Pharmaceutical giant Johnson & Johnson is also reporting, alongside United Airlines, which is expected to provide insights into airline demand trends. Delta Air Lines recently reinstated its guidance, citing improving industry fundamentals.
Inflation Metrics and Fed’s Beige Book
Investors will focus on June’s producer price index, expected to show a slight slowdown in annual inflation but a modest uptick month-over-month. The Federal Reserve’s Beige Book, summarizing economic conditions across regions, will also be released. Analysts expect the report to highlight ongoing stagflation risks, with growth challenges and inflationary pressures stemming from trade tensions.
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