Wall Street showed a mixed performance with modest fluctuations early on Wednesday as investors awaited new retail sales data and any potential signals from Federal Reserve officials regarding future interest rate decisions. Futures for the S&P 500 were up 0.2%, while Dow Jones Industrial Average futures remained unchanged, and Nasdaq futures rose by 0.4%.
Markets are still feeling some relief after the U.S. and China agreed on Monday to a 90-day pause in their trade conflict to allow for negotiations. However, it remains uncertain how this pause will influence the Fed’s next rate decisions.
After April’s inflation data showed a third consecutive month of cooling, Fed officials would likely have considered resuming interest rate cuts had tariffs not been in place. While the Fed cut its key interest rate three times last year, it has since paused any further changes while it monitors how tariffs and other policy adjustments, such as immigration restrictions and potential tax cuts, impact the economy.
Investors and economists are keenly watching speeches from Fed officials. Fed Governor Christopher Waller and Vice Chair Philip Jefferson are set for public appearances on Wednesday, followed by a speech from Fed Chair Jerome Powell at a conference in Washington on Thursday.
Additionally, Thursday will see the release of the latest U.S. retail sales data, and Walmart’s quarterly earnings report. Investors are expected to focus more on Walmart’s forecast than its actual results, as many companies, including American Eagle Outfitters, have pulled back on financial guidance for 2025 due to ongoing uncertainty surrounding President Trump’s tariffs. American Eagle’s share price dropped by over 14% after it announced a $75 million write-off and a forecasted 5% revenue drop in the first quarter.
In Asia, Chinese markets surged on hopes of an increase in export orders during the 90-day tariff grace period between the U.S. and China. Hong Kong’s Hang Seng index gained 2.3%, closing at 23,640.65, and the Shanghai Composite rose 0.9% to 3,403.95. Chinese tech companies saw significant gains, with Tencent up 3%, Baidu rising 4%, and Alibaba advancing 3.4%.
Japan’s Nikkei 225 fell by 0.1% to 38,128.13, while Australia’s S&P/ASX 200 gained 0.1%, reaching 8,279.60. South Korea’s Kospi surged by 1.2%, closing at 2,640.57.
Despite the relief from the U.S.-China trade pause, global businesses and investors remain cautious due to uncertainty about how long the truce will last and the potential future direction of tariffs.
In Europe, the CAC 40 in France slipped by 0.5%, the DAX in Germany fell by 0.4%, and Britain’s FTSE 100 remained mostly unchanged.
Crude oil prices retreated following a four-day rally, with U.S. benchmark crude falling by 77 cents to $62.90 a barrel and Brent crude decreasing by 75 cents to $65.88 a barrel.
The U.S. dollar weakened slightly, falling to 146.02 Japanese yen from 147.21 yen, while the euro gained value, rising to $1.1225 from $1.1188.
