U.S. Stocks May See Further Upside In Early Trading

The major U.S. index futures are currently pointing to a higher open on Wednesday, with stocks likely to see further upside after moving notably higher over the two previous sessions.

Stocks may continue to benefit from recent upward momentum following recent announcements of trade deals between the U.S. and the U.K. and China.

Overall trading activity may be somewhat subdued, however, with a lack of major U.S. economic data likely to keep some traders on the sidelines.

A slew of U.S. economic data is scheduled to be released on Thursday, including reports on producer price inflation, retail sales and industrial production.

After moving sharply higher over the course of Monday’s session, stocks turned in another strong performance during trading on Tuesday. The Nasdaq and the S&P 500 reached their best closing levels in well over two months, with the S&P 500 turning positive for 2025.

The Nasdaq and the S&P 500 pulled back off their best levels going into the end of the day but remained firmly positive. The Nasdaq jumped 301.74 points or 1.6 percent to 19,010.08 and the S&P 500 climbed 42.36 points or 0.7 percent to 5,886.55.

The narrower Dow, on the other hand, spent most of the day in negative territory before closing down 269.67 points or 0.6 percent at 42,140.43.

The continued strength in the broader markets came following the release of a Labor Department report showing consumer prices in the U.S. rose by slightly less than expected in the month of April.

The Labor Department said its consumer price index inched up by 0.2 percent in April after edging down by 0.1 percent in March. Economists had expected consumer prices to rise by 0.3 percent.

Excluding food and energy prices, core consumer prices also rose by 0.2 percent in April after creeping up by 0.1 percent in March. Core consumer prices were also expected to climb by 0.3 percent.

The report also said the annual rate of growth by consumer prices slowed to 2.3 percent in April from 2.4 percent in March, while the annual rate of growth by core consumer prices was unchanged at 2.8 percent.

The slightly tamer-than-expected inflation data eased concerns about President Donald Trump’s new tariffs on U.S. trade partners leading to higher prices.

Yesterday’s news about a U.S.-China trade deal slashing steep tariffs on each other’s goods also contributed to the extended rally on Wall Street.

Meanwhile, a steep drop by shares of UnitedHealth (UNH) weighed on the Dow, with the healthcare giant plunging by 17.8 percent.

The nosedive by UnitedHealth came after the company suspended its full-year guidance and announced Andrew Witty is stepping down as CEO for personal reasons.

Computer hardware and semiconductor extended the surge seen during Monday’s session, contributing to the strong upward move by the tech-heavy Nasdaq.

Considerable strength was also visible among airline stocks, as reflected by the 2.9 percent jump by the NYSE Arca Airline Index.

Oil producer, networking and brokerage stocks also saw notable strength, while healthcare, biotechnology and pharmaceutical stocks showed significant moves to the downside.

Commodity, Currency Markets

Crude oil futures are falling $0.67 to $63 a barrel after surging $1.72 to $63.67 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $3,209.10, down $38.70 compared to the previous session’s close of $3,247.80. On Tuesday, gold climbed $19.80.

On the currency front, the U.S. dollar is trading at 146.10 yen compared to the 147.48 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.227 compared to yesterday’s $1.1185.

Asia

Asian stocks moved mostly higher on Wednesday as investors digested softer-than-expected inflation data from the U.S. and awaited more clarity on ongoing trade talks.

Regional tech stocks surged after Nvidia announced the sale of over 18,000 AI chips to Saudi Arabian firm Humain during the Saudi-U.S. Investment Forum.

Gold prices fell nearly 1 percent as easing U.S.-China trade tensions weakened the safe-haven demand for the previous metal. Oil prices dipped after industry data signaled rising stockpiles.

China’s Shanghai Composite index jumped 0.9 percent to 3,403.95 as investors assessed the latest trade developments.

China lifted a ban on Boeing deliveries after the weekend tariff truce. The United States said it would reduce the “de minimis” tariff on low-value Chinese goods, according to an executive order.

Hong Kong’s Hang Seng Index soared 2.3 percent to 23,640.65, with tech giants like Tencent and Alibaba leading the surge. E-commerce giant JD.com rallied 3.4 percent after it beat market estimates for quarterly revenue.

Seoul stocks rose for a third day running on eased trade woes. The Kospi climbed 1.2 percent to 2,640.57, with semiconductor, bio and entertainment shares pacing the gainers. Chip giant SK Hynix surged 3.8 percent.

Australian markets ended marginally higher after a choppy session as traders scaled back expectations of RBA’s rate cuts.

The benchmark S&P/ASX 200 Index edged up by 0.1 percent to 8,279.60, while the broader All Ordinaries Index closed up 0.1 percent at 8,520.20.

Macquarie Group shares fell 1.6 percent as the corporate regulator sued the investment bank alleging it misreported up to 1.5 billion short sales over a decade and a half.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 index finished marginally lower at 12,779.26.

Europe

European stocks are slightly lower in cautious trading on Wednesday, as investors await cues from Thursday’s U.S. retail sales data and upcoming talks between Ukraine and Russia in Istanbul.

Meanwhile, German consumer price inflation softened to a six-month low in April on falling energy prices, as initially estimated, final data from Destatis showed.

The consumer price index rose 2.1 percent year-on-year, following a 2.2 percent increase in March. The rate came in line with the initial estimate.

Inflation based on the harmonized index of consumer prices slowed for a third month in a row in April. HICP inflation eased to 2.2 percent, as estimated, from 2.3 percent in March.

The French CAC 40 Index is down by 0.3 percent and the German DAX Index is down by 0.2 percent, while the U.K.’s FTSE 100 Index is nearly unchanged.

French IT group Atos SE has moved sharply lower after it unveiled a new strategic and transformation plan.

Train maker Alstom has also plummeted after its guidance for fiscal year 2025-26 came in below expectations.

Europe’s largest travel operator TUI has also shown a substantial move to the downside after reporting a wider fiscal second quarter loss

Tobacco company Imperial Brands has also plunged after mixed half-yearly results and the announcement of CEO retirement.

On the other hand, construction-to-telecoms group Bouygues has rallied after its first quarter core earnings beat estimates.

ABN AMRO Bank has also moved sharply higher after the Dutch bank reported first-quarter profit that beat expectations.

Burberry Group has also soared. The British luxury brand said it would cut 1700 jobs globally amid an uncertain macro environment.

U.S. Economic News

Federal Reserve Vice Chair Philip Jefferson is scheduled to speak on the economic outlook at the Annual Conference of Second District Directors and Advisors at 9:10 am ET.

At 10:30 am ET, the Energy Information Administration is due to release its report on oil inventories in the week ended May 9th at 10:30 am ET. Crude oil inventories are expected to dip by 1.0 million barrels after falling by 2.0 million barrels in the previous week.

San Francisco Federal Reserve President Mary Daly is scheduled to participate in a fireside chat before the California Bankers Association 25th Annual Conference and Directors Forum at 5:40 pm ET.