Inflation Data, U.S.-China Deal May Generate Early Buying Interest

The major U.S. index futures are currently pointing to a higher open on Wednesday, with stocks poised to add to the gains posted in the previous session.

The futures advanced following the release of a closely watched Labor Department report showing U.S. consumer prices increased by slightly less than expected in the month of May.

The Labor Department said its consumer price index inched up by 0.1 percent in May after rising by 0.2 percent in April. Economists had expected another 0.2 percent increase.

Meanwhile, the report said the annual rate of consumer price growth accelerated to 2.4 percent in May from 2.3 percent in April. The annual rate of consumer price growth was expected to speed up to 2.5 percent.

Excluding food and energy prices, core consumer prices still crept up by 0.1 percent in May after edging up by 0.2 percent in April. Economists had expected core consumer prices to rise by another 0.2 percent.

The annual rate of core consumer price growth in May was unchanged from the previous month at 2.8 percent, while economists had expected the annual rate of core consumer price growth to accelerate to 2.9 percent.

The upward momentum on Wall Street also comes after U.S. and Chinese officials announced an agreement in principle on a framework to ease trade disputes between the two economic superpowers.

The plan is subject to approval by President Donald Trump and his Chinese counterpart Xi Jinping, Commerce Secretary Howard Lutnick told reporters.

Without specifying the terms of the framework, Lutnick indicated that both sides agreed to lift export controls on key goods and technologies.

In a subsequent post on Truth Social, Trump said the deal calls on China to supply full magnets and “any necessary rare earths” up front.

“WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%,” Trump added. “RELATIONSHIP IS EXCELLENT!”

U.S. stocks moved modestly to the upside on Tuesday as traders await the outcome of the ongoing trade talks between China and the U.S. in London.

Trade negotiations between the world’s two largest economies commenced on Monday and while U.S. Commerce Secretary Howard Lutnick told reporters the talks are “going well,” there has been no breakthrough as of yet.

The Dow climbed 105.11 points or 0.3 percent to finish at 42,866.87, while the Nasdaq gained 123.75 points or 0.6 percent to close at 19,714.99 and the S&P 500 added 32.93 points or 0.6 percent to end at 6,038.81.

In economic news, the National Federation of Independent Business said the NFIB Small Business Optimism Index in the U.S. increased to 98.8 in May 2025, the highest in three months, compared to 95.8 in April. The reading was expected to come in with a score of 95.9.

But a lack of major U.S. economic data probably kept traders on the sidelines as they looked ahead to the release of crucial reports on consumer and producer price inflation.

Commodity, Currency Markets

Crude oil futures are jumping $1.09 to $66.07 a barrel after falling $0.31 to $64.98 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $3,381.30, up $37.90 compared to the previous session’s close of $3,343.40. On Tuesday, gold fell $11.50.

On the currency front, the U.S. dollar is trading at 144.51 yen compared to the 144.87 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1470 compared to yesterday’s $1.1425.

Asia

Asian stocks advanced on Wednesday after top U.S. and Chinese officials said they have reached a framework to implement the Geneva consensus following two days of discussions in London.

Regional gains were capped, however, as investors awaited the details of the outcome of trade talks and looked ahead to the release of U.S. consumer inflation data later in the day for direction.

A muted dollar helped lift gold prices higher, while oil prices were little changed in Asian trading.

China’s Shanghai Composite Index gained 0.5 percent to close at 3,402.32, with automakers rising after pledging to shorten payment terms for suppliers. Hong Kong’s Hang Seng Index jumped 0.8 percent to 24,366.94, with EV and tech stocks leading the surge.

Japanese markets rose as new data showed wholesale inflation slowed in May, easing pressure on the Bank of Japan to raise interest rates at its next policy board meeting.

The Nikkei 225 Index climbed 0.6 percent to 38,421,19, extending gains for a fourth straight session. The broader Topix Index settled marginally higher at 2,788.72.

Seoul stocks rallied to over three-year high after President Lee Jae-myung said the government was preparing to revamp the country’s tax system as part of a broader push to make the domestic stock market more attractive.

Investors also cheered data that showed unemployment rate the country remained at 2.7 percent for a second consecutive month, in line with market expectations.

The Kospi jumped 1.2 percent to 2,907.04, marking the highest level since January 14, 2022. SK Hynix surged 4.1 percent and Hyundai Mobis soared 4.9 percent.

Australian markets gave up early gains to end marginally higher at a four-month peak, with real estate, mining and energy stocks pacing the gainers.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index rose 0.3 percent to 12,605.93.

Europe

European shares have edged higher in cautious trading on Wednesday as investors monitor the latest updates from Sino-U.S. talks.

After two days of discussions in London, U.S. and Chinese officials have agreed on a limited framework to put their trade truce back on track.

If approved, the deal will remove some restrictions on China’s rare earth exports and unwind a few recent U.S. export bans.

While the German DAX Index is up by 0.5 percent, the U.K.’s FTSE 100 Index is up by 0.3 percent and the French CAC 40 Index is up by 0.1 percent.

British homebuilder shares were rallying ahead of a public spending announcement from the U.K. finance minister.

Ibstock shares plummeted nearly 14 percent. The building materials manufacturer has warned of margins pressure despite reporting higher first-half sales.

Zara owner Inditex tumbled 4.3 percent after first-quarter sales came in below expectations.

Ricardo soared 25 percent after the engineering group agreed to a £281 million takeover by Canadian consultancy WSP Global.

U.S. Economic News

A closely watched report released by the Labor Department on Wednesday showed a slight increase by consumer prices in the U.S. in the month of May.

The Labor Department said its consumer price index inched up by 0.1 percent in May after rising by 0.2 percent in April. Economists had expected another 0.2 percent increase.

Meanwhile, the report said the annual rate of consumer price growth accelerated to 2.4 percent in May from 2.3 percent in April. The annual rate of consumer price growth was expected to speed up to 2.5 percent.

Excluding food and energy prices, core consumer prices still crept up by 0.1 percent in May after edging up by 0.2 percent in April. Economists had expected core consumer prices to rise by another 0.2 percent.

The annual rate of core consumer price growth in May was unchanged from the previous month at 2.8 percent, while economists had expected the annual rate of core consumer price growth to accelerate to 2.9 percent.

At 10:30 am ET, the Energy Information Administration is due to release its report on crude oil inventories in the week ended June 6th. Crude oil inventories are expected to inch up by 0.1 million barrels after falling by 4.3 million barrels in the previous week.

The Treasury Department is scheduled to announce the results of this month’s auction of $39 billion worth of ten-year notes at 1 pm ET.