U.S. stock index futures fell in Asian trade on Tuesday, as Wall Street appeared to be cooling after stellar gains on the announcement of a U.S.-China trade deal, with focus now on key upcoming inflation data for more economic cues.
S&P 500 Futures fell 0.4% to 5,840.75 points, while Nasdaq 100 Futures fell 0.5% to 20,844.0 points by 00:30 ET (04:30 GMT). Dow Jones Futures fell 0.3% to 42,370.0 points.
Losses in futures came amid some potential profit-taking, and as sentiment eased before key U.S. inflation data due later on Tuesday, given that the reading comes amid heightened fears over inflation remaining sticky over the coming months.
Wall St soars on US-China tariff relief Futures retreated after Wall Street clocked stellar gains on Monday, as investors cheered a sharp deescalation in trade tensions between Washington and Beijing.
The U.S. will slash its 145% tariff rate on Beijing to 30%, while China will cut its retaliatory tariffs to 10% from 125%, both for a period of 90 days.
China also agreed to roll back non-tariff measures such as rare earth export controls.
The deal was announced in a rare joint statement by U.S. and Chinese officials, and came after high-level talks in Geneva, Switzerland, over the weekend.
The S&P 500 surged 3.3% to 5,844.17 points, while the NASDAQ Composite rose 4.4% to 18,708.34 points. The Dow Jones Industrial Average jumped 2.8% to 18,708.34 points.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. Gains were broad-based, although major technology stocks rose sharply on hopes that major device makers such as Apple (NASDAQ:AAPL) will now face fewer trade-related disruptions. Artificial intelligence-linked stocks- such as hyperscalers Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOGL), and chipmakers Nvidia (NASDAQ:NVDA) and Broadcom- were encouraged by a BofA note that said capital spending on AI infrastructure was likely to remain strong this year and the next.
CPI inflation awaited for insight on interest rates, economic growth But despite optimism over the trade deal, markets were now seen turning cautious ahead of key consumer price index inflation data, which is due on Tuesday morning.
The print is expected to show headline and core CPI remained sticky in April and unchanged from the prior month, especially as Trump’s tariffs pushed up input costs for businesses.
While Monday’s trade deal does mark a deescalation, tariffs on China are still well above levels seen prior to April 2- a trend that could underpin U.S. inflation.
The inflation data is widely expected to factor into the Federal Reserve’s plans for interest rates, after the central bank recently signaled that it saw no near-term changes in rates.
Still, the Fed is widely expected to cut interest rates eventually this year. The CME Fedwatch tool shows investors pricing in a 36.3% chance for an end-July rate cut, and a 52.1% chance for a September cut.
