Dow Futures indicate a modest decline as the market anticipates a series of significant earnings reports from major technology companies, alongside important economic data from the U.S. this week. Investors will be monitoring data from Microsoft and Meta Platforms, as well as metrics related to U.S. growth and inflation. In other developments, U.S. President Donald Trump has signed orders aimed at mitigating the impact of his significant auto tariffs, while a senior White House official has announced that a trade agreement has been finalized with an undisclosed foreign nation.
U.S. stock futures declined across the board on Wednesday, as investors focused on a packed week of corporate earnings and U.S. economic data, alongside new developments concerning trade policies from the Trump administration. The Dow Futures contract remained largely stable, whereas S&P 500 futures experienced a decline of 12 points, equivalent to 0.2%, and Nasdaq 100 futures decreased by 65 points, or 0.3%.
The primary indices on Wall Street concluded trading on Tuesday with gains, buoyed by signs of advancement in tariff discussions at the White House. Nonetheless, concerns persist that the levies may ultimately hinder U.S. growth and trigger a recession in the global economy. In light of this context, a number of prominent corporations are set to announce their results in the upcoming days, featuring a selection of large-cap technology firms. Upcoming figures on the U.S. economy are poised to be released in the coming days, potentially offering valuable insights into overall activity and the health of the labor market. On Tuesday, surveys indicated that job openings decreased slightly in March, while consumer confidence fell in April.
On Tuesday, Trump enacted orders designed to mitigate the effects of his auto tariffs by providing credits and exemptions from duties on specific materials. The actions unfolded as Trump made his way to Michigan, the historic epicenter of the American automotive sector, accompanied by an impending implementation of substantial 25% tariffs. In light of recent developments, the president has consented to provide car manufacturers with a two-year period to increase the proportion of their manufacturing activities within the United States, aligning with the previously articulated objectives of his assertive tariff strategies. Automobile manufacturers, a significant number of which depend on supply chains that often traverse international boundaries, have been actively advocating to the White House for modifications to its trade policy.
Trump stated that his administration “wanted to help them,” further noting he does not wish to impose penalties on these firms if “they can’t get parts.” A coalition of foreign automakers indicated that the order offered a degree of relief; however, they emphasized that additional measures are necessary to bolster the industry. In a separate statement, U.S. Commerce Secretary Howard Lutnick informed CNBC that a trade agreement has been finalized with a foreign nation, though he refrained from disclosing the identity of the country involved. Trump had earlier suspended extensive tariffs on numerous countries for a period of 90 days, indicating that the White House is working to establish a variety of tailored trade agreements.
The earnings calendar will feature results from software giant Microsoft and Facebook-owner Meta Platforms after markets close. The companies are part of a series of “Magnificent Seven” mega-cap tech players poised to report this week, with iPhone-maker Apple and e-commerce giant Amazon set to disclose earnings after the bell on Thursday. These groups have propelled markets upward in recent years; however, they have predominantly lagged this year. On Wednesday, chipmaker Qualcomm and construction equipment group Caterpillar are set to release their reports as well.
Executives are expected to face inquiries regarding their substantial investments in artificial intelligence, which have attracted attention following the introduction of a cost-effective AI model by the Chinese start-up DeepSeek earlier this year. The implications of Trump’s tariffs are likely to attract attention, particularly as numerous businesses have indicated that the unpredictable nature of these policy shifts has complicated their ability to formulate spending strategies.
Investors will be closely monitoring a series of significant economic data releases on Wednesday. An initial reading of first-quarter U.S. gross domestic product, a measure of growth in the world’s largest economy, is expected to have decelerated to 0.2% from 2.4% in the final three months of 2024. “Details of the report, especially on consumer spending, will be crucial for the market reaction,” analysts at ING noted in a communication to clients. Meanwhile, the personal consumption expenditures price index is also set to be released. The inflation metric is under careful scrutiny by the Federal Reserve, which has signaled a wait-and-see approach regarding future policy decisions as it evaluates the repercussions of Trump’s tariffs.
A distinct examination of private payrolls is scheduled for the calendar as well. Payrolls processor ADP’s report is expected to indicate that private employers added 114,000 roles in April, a decrease from the 155,000 recorded in the previous month. All of the data points could provide early indications of whether Trump’s tariffs are impacting the broader economy — an outcome that has been forecasted by numerous analysts.
Oil prices experienced a decline on Wednesday, positioning themselves for the most significant monthly decrease in over three years, as the global trade war adversely affected demand growth projections. At 03:45 ET, Brent futures experienced a decline of 1.5%, settling at $62.33 per barrel, while U.S. West Texas Intermediate crude futures decreased by 1.7%, reaching $59.41 per barrel. Both contracts have experienced a decline exceeding 15% this month, marking the most significant percentage drop since November 2021. Concerns regarding demand in the context of the trade war have dampened investor sentiment, and the release of disappointing Chinese manufacturing activity data earlier on Wednesday has further contributed to this narrative.