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U.S. stock index futures ticked higher on Wednesday, building on Tuesday’s upbeat momentum as markets bet on potential progress in U.S.-China trade talks. Traders are pinning their hopes on an upcoming call between President Donald Trump and Chinese President Xi Jinping, which could reinvigorate stalled negotiations.
As of 05:35 ET (09:35 GMT):
- Dow Jones Futures rose 90 points, or 0.2%
- S&P 500 Futures added 14 points, or 0.2%
- Nasdaq 100 Futures climbed 36 points, or 0.2%
This follows a strong Tuesday session, particularly for tech and chip stocks, as investors await further clarity on the White House’s evolving trade policy.
U.S.-China Trade Talks Back in Focus
The optimism stems from reports that President Trump and Xi Jinping will speak later this week. This conversation comes at a pivotal moment, as the U.S. deadline for trade partners to submit their “best offer” to avoid a new wave of tariffs ends today.
While the U.K. has reached a preliminary deal during Trump’s 90-day pause on broader tariffs, most major economies, including China, have yet to do so. Tensions remain high after Trump accused China of breaching a previous agreement—an allegation Beijing has denied.
Still, recent history suggests direct communication between Trump and Xi tends to ease investor nerves. ING strategists noted that markets are leaning cautiously optimistic, banking on the potential for de-escalation ahead of the scheduled call.
However, risks remain. Trump reaffirmed his hardline stance by enacting a 50% tariff on steel and aluminum, doubling the previous rate. He also characterized Xi as “very tough” and “extremely hard to make a deal with” in a post on Truth Social.
Eyes on Labor Market Data
Investors are also closely watching economic indicators, particularly labor market health, amid rising tariff risks.
- The ADP National Employment Report is expected to show private sector job additions rebounding to 111,000 in May, after plunging to 62,000 in April.
- Tuesday’s JOLTS report revealed an increase in job openings in April but also a rise in layoffs, raising concerns that the labor market may be starting to soften.
The nonfarm payrolls report on Friday remains the most anticipated data point of the week and could provide stronger insight into how the evolving trade and policy environment is impacting the broader U.S. economy.
Outlook
Markets appear cautiously hopeful, supported by the prospect of high-level U.S.-China diplomacy and resilient economic data. But with Trump’s tariff policy creating ongoing legal and economic uncertainty, and with global trade partnerships still in flux, sentiment remains fragile.
If the Trump-Xi call results in even temporary easing of trade tensions, it could offer a near-term tailwind for equities. Conversely, disappointment or escalation could quickly reverse the current optimism.
