U.S. stock index futures were stable Monday evening after a U.S.-China trade deal sparked a strong rally on Wall Street. Investors are now focusing on upcoming inflation data for further economic insights.
S&P 500 Futures held steady at 5,865.25 points, while Nasdaq 100 Futures remained unchanged at 20,942.0 points by 19:15 ET (23:15 GMT). Dow Jones Futures were also flat at 42,508.0 points.
Wall Street’s gains slowed as investors turned cautious ahead of key U.S. inflation data due on Tuesday. There are growing concerns that inflation may remain persistent in the coming months.
Wall Street Surges on U.S.-China Trade Deal
Futures stabilized after Wall Street saw significant gains on Monday. The rally was driven by relief over a de-escalation in trade tensions between the U.S. and China.
Under the new agreement, the U.S. will reduce its tariff rate on Chinese goods from 145% to 30%, while China will lower its retaliatory tariffs from 125% to 10% for 90 days. Additionally, China has agreed to lift certain non-tariff measures, including rare earth export controls.
The deal was announced in a joint statement by U.S. and Chinese officials following high-level talks in Geneva, Switzerland.
On Monday, the S&P 500 jumped 3.3% to 5,844.17 points, while the NASDAQ Composite rose 4.4% to 18,708.34 points. The Dow Jones Industrial Average gained 2.8% to 18,708.34 points.
Most sectors saw gains, with technology stocks leading the way. Investors were optimistic that companies like Apple would face fewer trade-related disruptions. Artificial intelligence-related stocks, including Microsoft, Google, Nvidia, and Broadcom, also saw gains. Bank of America’s recent note highlighted the expected strength in AI infrastructure spending this year and next.
Inflation Data Looms Over Markets
Despite the optimism from the trade deal, investors are awaiting consumer price index (CPI) inflation data, set to be released Tuesday morning. Economists expect the report to show that both headline and core CPI remained stable in April, with little change from the previous month. This is partly due to the effect of tariffs, which have raised costs for businesses.
Although the trade deal marks a de-escalation, tariffs on China are still higher than they were before April 2, which could continue to put upward pressure on U.S. inflation.
The CPI report will be closely watched as it could influence the Federal Reserve’s interest rate decisions. While the Fed has indicated no immediate changes in rates, many analysts expect a rate cut later this year. The CME FedWatch tool shows a 36.3% chance of a rate cut by the end of July and a 52.1% chance by September.
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