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U.S. stock index futures hovered near flat in early Wednesday trading, as investors caught their breath following a robust rally sparked by easing tariff tensions. Market focus has now shifted to the upcoming earnings release from chipmaker Nvidia (NASDAQ:NVDA) and fresh updates on global trade policy.
At 06:42 a.m. ET, Dow E-minis slipped by 2 points, while S&P 500 E-minis edged up 4.25 points, or 0.07%, and Nasdaq 100 E-minis gained 39 points, or 0.18%.
Nvidia, the AI bellwether, rose 0.6% in premarket trading ahead of its highly anticipated earnings report, due after the market close. Analysts are expecting a 66.2% jump in first-quarter revenue, according to LSEG data, as demand for AI chips surges across industries. Options markets reflected heightened anticipation, with defensive strategies seeing heavy inflows into the VanEck Semiconductor ETF, a major sector gauge.
The previous session’s strong gains were fueled by President Donald Trump’s decision to postpone his planned 50% tariffs on European Union goods to July 9, offering markets a reprieve and boosting risk appetite. The delay opens a window for negotiations between Washington and Brussels, which investors hope will prevent an escalation in trade tensions.
Tuesday’s rally lifted the S&P 500 and Nasdaq toward their best monthly performance since November 2023, helped by a combination of easing trade concerns, upbeat earnings, and subdued inflation readings. The S&P 500 is now less than 4% away from its record closing high set on February 19, after dropping as much as 18.9% below that level during the height of tariff-related volatility in recent months.
On the economic front, traders are awaiting the minutes of the Federal Reserve’s latest policy meeting, set for release at 2 p.m. ET, for further insights into the central bank’s interest rate trajectory. Additional data points due this week include the Fed’s preferred inflation gauge—the Personal Consumption Expenditures (PCE) report for April—and a second estimate of first-quarter GDP.
New York Fed President John Williams added to the cautious tone, stating that central banks must “respond relatively strongly” when inflation drifts away from targets, especially given the uncertainty surrounding trade policy.
U.S. Treasury yields inched higher in early trade, with the 10-year yield up 4.1 basis points at 4.47%, after retreating from multi-month highs reached last week amid concerns over fiscal sustainability in the U.S. and other major economies.
In corporate news, shares of Brazilian airline Azul plunged over 40% in premarket trading after the company filed for Chapter 11 bankruptcy protection, highlighting continued turbulence in global travel markets.
Overall, markets are poised for a cautious but constructive session, with Nvidia’s earnings and global trade developments likely to set the tone for near-term sentiment.
