U.S. stock index futures edged higher Wednesday, adding to the previous session’s solid gains amid optimism that potential talks between President Donald Trump and Chinese President Xi Jinping could revitalize trade negotiations.
The main averages on Wall Street ended higher on Tuesday, buoyed in particular by chip stocks, with traders awaiting more details on potential trade negotiations between the U.S. and a host of other countries.
Trump, Xi may hold call this week as trade talks stall
The deadline for U.S. trading partners to submit their "best offer" to avoid punishing import tax rates ends later Wednesday, and so far, only Britain has struck a preliminary trade agreement with the U.S. during Trump’s 90-day pause on a wider array of tariffs.
The White House has said that President Donald Trump will speak with Chinese counterpart Xi Jinping this week, just days after Trump accused Beijing of violating a prior agreement to ease tit-for-tat levies. China has refuted the allegations.
The president’s tariff agenda is also facing legal challenges within the country.
Writing on Truth Social on Wednesday, Trump called Xi "very tough" and "extremely hard to make a deal with".
"Markets may also be adopting a slightly more optimistic stance on U.S.-China trade tensions ahead of the scheduled Trump-Xi call this week," strategists at ING said in a note to clients. "Recently, such direct talks have eased trade pressures."
That said, Trump earlier signed a proclamation raising his tariffs on steel and aluminum to 50% from 25%, making good on his earlier threat, with the higher duties effective from Wednesday.
More labor data due
Markets will have the chance to parse through more labor market data later in the session that could shed further light on the impact of Trump’s tariff agenda on the American labor market.
Economists anticipate that the ADP National Employment Report will show that private employers added 111,000 jobs in May, having slowed sharply to 62,000 in April.
Separate data on Tuesday from the U.S. Labor Department found that job openings grew in April, although layoffs increased, potentially indicating some softening in the labor market, ahead of the all-important monthly nonfarm payrolls report on Friday.
CrowdStrike slumps on soft guidance
In the corporate sector, Hewlett Packard Enterprise (NYSE:HPE) stock rose after the information technology company reported stronger-than-expected quarterly earnings.
On the flip side, CrowdStrike (NASDAQ:CRWD) shares slipped lower after the cybersecurity company posted soft guidance on revenue for the current quarter.
Budget retailer Dollar Tree (NASDAQ:DLTR) is also scheduled to release earnings before the open.
Crude steadies after gains
Oil prices hovered around the flatline Wednesday, falling back from recent highs generated after OPEC+ increased output amid concerns that tariffs will hit global economic activity.
At 05:35 ET, Brent futures were down 0.1% to $65.60 a barrel, and U.S. West Texas Intermediate crude futures 0.1% lower to $63.34 per barrel.
