S&P Futures Tick Higher as Investors Shrug Off Trump’s Tariff Threats, FOMC Minutes on Tap

New York Stock Exchange during sunrise by Deberarr via iStock

September S&P 500 E-Mini futures (ESU25) are trending up +0.16% this morning as investors look past U.S. President Donald Trump’s latest tariff threats and await the Federal Reserve’s June meeting minutes.

Just days after the U.S. started sending letters to trading partners announcing reciprocal tariffs under a new August 1st deadline, sector-specific duties have returned to the spotlight. President Trump on Tuesday announced a large 50% tariff on copper that could take effect by August 1st or earlier. Mr. Trump also proposed a tariff of up to 200% on pharmaceutical products but noted that companies would have up to a year and a half to prepare. He said that semiconductor tariffs are also under consideration.

President Trump signaled that additional tariff details could be unveiled on Wednesday, with tariff letters possibly being sent to as many as seven countries this morning. “We will be releasing a minimum of 7 Countries having to do with trade, tomorrow morning, with an additional number of Countries being released in the afternoon,” Trump said on Truth Social late Tuesday.

In yesterday’s trading session, Wall Street’s major indexes ended mixed. Fair Isaac (FICO) slumped over -8% and was the top percentage loser on the S&P 500 after Federal Housing Finance Agency Director Bill Pulte announced on social media that Fannie Mae and Freddie Mac will permit lenders to use the VantageScore 4.0 credit scoring model. Also, Datadog (DDOG) slid more than -4% and was the top percentage loser on the Nasdaq 100 after Guggenheim downgraded the stock to Sell from Neutral with a $105 price target. In addition, solar stocks plunged after the White House said it would “rapidly eliminate the market distortions and costs imposed on taxpayers by so-called ‘green’ energy subsidies,” with Sunrun (RUN) tumbling over -11% and First Solar (FSLR) falling more than -6%. On the bullish side, chip stocks advanced, with Intel (INTC) climbing over +7% to lead gainers in the Nasdaq 100 and GlobalFoundries (GFS) rising more than +6%.

Economic data released on Tuesday showed that U.S. consumer credit rose $5.10 billion in May, weaker than expectations of $10.40 billion.

Today, market watchers will parse the Fed’s minutes from the June 17-18 meeting for any additional clues on potential interest rate cuts. While there have been recent signs of divisions leaning toward a more dovish stance, PMI and jobs data have indicated economic resilience, supporting the delay of interest rate cuts until later in the year.

Meanwhile, U.S. rate futures have priced in a 95.3% probability of no rate change and a 4.7% chance of a 25 basis point rate cut at July’s monetary policy meeting.

On the economic data front, investors will focus on U.S. Wholesale Inventories data, which is set to be released in a couple of hours. Economists expect the final May figure to be -0.2% m/m, compared to +0.2% m/m in April.

U.S. Crude Oil Inventories data will be released today as well. Economists expect this figure to be -1.700M, compared to last week’s value of 3.845M.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.394%, down -0.50%.

The Euro Stoxx 50 Index is up +1.17% this morning as investors look ahead with some optimism to a potential trade deal with the U.S., while shrugging off President Donald Trump’s latest tariff threats. Bank and defense stocks led the gains on Wednesday. European Commission President Ursula von der Leyen said on Wednesday that the EU is working closely with the Trump administration to secure a trade deal, though Brussels is preparing for all possible outcomes. Earlier in the day, the Financial Times reported that EU negotiators are close to finalizing a trade deal with the U.S. that would lock in higher tariffs than those offered to the U.K. Trump said on Tuesday that despite progress on a trade deal with the European Union, frustration over the bloc’s taxes and penalties on U.S. tech firms could lead him to unilaterally announce a new tariff rate within the next two days. In corporate news, EssilorLuxottica (EL.FP) climbed over +5% after Bloomberg reported that Meta Platforms acquired a nearly 3% stake in the eyewear maker.

The European economic data slate is empty on Wednesday.

Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.13%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.33%.

China’s Shanghai Composite Index reversed earlier gains and closed lower today as the country’s deepening deflationary trend heightened concerns over its growth outlook. Investors also digested U.S. President Trump’s latest tariff threats. At the same time, Trump said trade talks with Beijing were progressing well. Data from the National Bureau of Statistics released on Wednesday showed that China’s deflationary pressures remained elevated in June. China’s producer deflation deepened to its worst level in nearly two years last month as the economy grappled with uncertainty stemming from a global trade war and tepid domestic demand. While consumer prices rose for the first time in five months, the improvement was modest and likely reflected a boost from Beijing’s consumer goods trade-in program, which economists anticipate will soon fade. The persistently weak inflation may continue to pressure policymakers to step up stimulus efforts to break the vicious cycle of falling prices, corporate earnings, and wages. Fierce competition among companies has also contributed to the deflationary pressures, as they engage in aggressive price wars that policymakers are now aiming to curb. Meanwhile, Zheng Shanjie, chairman of the National Development and Reform Commission, stated at a press conference on Wednesday that China’s economy is projected to surpass 140 trillion yuan ($19.5 trillion) in size this year. In other news, China’s commerce ministry on Wednesday announced that it had placed eight Taiwanese companies from the aerospace, shipbuilding, and technology sectors on its export control list. In corporate news, Henderson Land Development sank over -8% in Hong Kong after raising $1 billion through a convertible bond offering. Investor focus now shifts to the July Politburo meeting for more policy signals following the government’s recent initiatives to curb factory overcapacity.

The Chinese June CPI came in at -0.1% m/m and +0.1% y/y, compared to expectations of no change m/m and -0.1% y/y.

The Chinese June PPI fell -3.6% y/y, weaker than expectations of -3.2% y/y.

Japan’s Nikkei 225 Stock Index ended higher today, buoyed by the yen’s weakness against the dollar, despite lingering concerns over U.S. tariffs. The greenback extended gains as U.S. President Donald Trump vowed more trade-related proclamations following the announcement of 25% tariffs on Japan and other trading partners. Trump also said he would not provide further extensions on country-specific tariffs set to take effect on August 1st. Automobile stocks gained ground on Wednesday on the back of a weaker yen. A weaker Japanese currency typically lifts shares of exporters, as it raises the value of their overseas profits in yen terms when repatriated back to Japan. Energy stocks also advanced after oil prices hit a two-week high on Tuesday. Meanwhile, Japan’s top trade negotiator, Ryosei Akazawa, had a 40-minute phone conversation with U.S. Commerce Secretary Howard Lutnick on Tuesday, during which both sides agreed to “actively” continue negotiations. Earlier on Tuesday, Japanese Prime Minister Shigeru Ishiba said that he would keep negotiating with the U.S. to pursue a mutually beneficial trade agreement. Bloomberg reported that U.S. Treasury Secretary Scott Bessent plans to travel to Japan next week to attend the 2025 World Expo in Osaka. On the monetary policy front, Bank of Japan board member Junko Koeda said it was premature to predict how soon the BOJ might resume interest rate hikes, citing uncertainty over the economic outlook. In corporate news, Yoshinoya Holdings climbed over +6% after the fast-food chain posted a 9% increase in quarterly net profit, supported by robust sales in its new ramen business. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -7.52% to 23.60.

Pre-Market U.S. Stock Movers

Microsoft (MSFT) gained nearly +1% in pre-market trading after Oppenheimer upgraded the stock to Outperform from Perform with a $600 price target.

AES Corp. (AES) jumped over +11% in pre-market trading after Bloomberg reported that the renewable power company was exploring options, including a possible sale, amid takeover interest.

Verona Pharma (VRNA) soared more than +20% in pre-market trading after the Financial Times reported that Merck was close to buying the respiratory drugmaker for about $10 billion.

Doximity (DOCS) rose over +3% in pre-market trading after Evercore ISI upgraded the stock to Outperform from In Line with a price target of $70.

Aehr Test Systems (AEHR) plummeted more than -20% in pre-market trading after the company posted weaker-than-expected FQ4 revenue and said it wasn’t “reinstating specific guidance beyond what we have already stated” amid tariff-related uncertainty.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Wednesday - July 9th

AZZ (AZZ), Methode Electronics (MEI), Bassett (BSET).


On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.