U.S. equity futures pointed to early gains on Tuesday, setting the stage for a positive open as investors digested fresh inflation data and a key update from chip giant Nvidia.
Nvidia (NASDAQ:NVDA) was a standout in premarket trading, jumping 4.7% after the company revealed it would “soon” resume shipments of its AI-focused H20 chips to China.
“The U.S. government has assured NVIDIA that licenses will be granted, and NVIDIA hopes to start deliveries soon,” the company said in a statement, offering a boost to investor sentiment and signaling easing tensions in U.S.-China tech relations.
The rally in futures came shortly after the U.S. Labor Department published its June inflation numbers, which came in largely as expected. The Consumer Price Index (CPI) rose 0.3% last month, matching forecasts and marking an uptick from May’s 0.1% increase.
On a year-over-year basis, headline inflation rose to 2.7%, up from 2.4% in May and slightly higher than the anticipated 2.6%. Core CPI, which strips out food and energy, also met expectations with a 0.2% rise in June. The annual core inflation rate ticked up to 2.9%, in line with estimates and a marginal increase from May’s 2.8%.
Investors appeared relieved by the lack of surprises in the report, which could help keep Fed rate policy on a stable trajectory in the coming months.
Markets managed to close slightly higher on Monday after a directionless start to the week. The Nasdaq Composite added 54.80 points, or 0.3%, closing at 20,640.33. The Dow Jones Industrial Average advanced 88.14 points, or 0.2%, to 44,459.65, while the S&P 500 edged up 8.81 points, or 0.1%, to finish at 6,268.56.
That strength emerged even as trade concerns loomed. Former President Donald Trump renewed threats of sweeping tariffs, pledging to slap a 30% import tax on goods from the EU and Mexico starting August 1.
“Countries should sit back and say, ‘Thank you for the many year’s long free ride, but we know you now have to do what’s right for America,’” Trump posted on Truth Social. “We should respond by saying, ‘Thank you for understanding the situation we are in. Greatly appreciated!’”
In an effort to de-escalate the brewing trade dispute, the European Union said it would hold off on imposing its own set of tariffs for now. EU Commission President Ursula von der Leyen told reporters, “We will therefore also extend the suspension of our countermeasures till early August. At the same time, we will continue to prepare further countermeasures so we are fully prepared.”
“We have always been very clear that we prefer a negotiated solution. This remains the case, and we will use the time that we have now till the 1st of August (to negotiate),” she added at a press conference in Brussels.
The EU had been set to launch retaliatory duties on $25 billion of U.S. products, in response to American tariffs on European steel and aluminum. With negotiations continuing, markets are watching closely for signs of progress—or escalation.
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