Dow futures indicate a modest decline in anticipation of a series of significant earnings reports from major technology firms, alongside essential economic data from the United States scheduled for release this week. Investors are poised to monitor data from Microsoft and Meta Platforms, as well as metrics related to U.S. economic growth and inflation. In other developments, U.S. President Donald Trump has enacted measures to mitigate the impact of his significant auto tariffs, as a senior official from the White House announces that a trade agreement has been finalized with an undisclosed foreign nation.
U.S. stock futures declined across the board on Wednesday, as market participants focused on a week filled with corporate earnings reports and U.S. economic data, alongside new developments concerning trade policies from the Trump administration. The Dow futures contract exhibited minimal movement, whereas S&P 500 futures experienced a decline of 12 points, translating to a decrease of 0.2%. Meanwhile, Nasdaq 100 futures saw a reduction of 65 points, equivalent to a drop of 0.3%.
The principal indices on Wall Street closed higher on Tuesday, buoyed by signs of advancement in tariff negotiations emanating from the White House. 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 near term, featuring a selection of large-cap technology firms (details to follow). Upcoming figures on the U.S. economy are poised to be released, potentially offering valuable insights into overall activity and the robustness of the labor market. On Tuesday, surveys indicated a slight decline in job openings for March, while consumer confidence experienced a downturn 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 developments occurred as Trump made his way to Michigan, the historical center of the American automotive sector, where a new series of significant 25% tariffs are set to be implemented shortly. In line with the recent adjustments, the president has consented to provide automakers with a two-year timeframe to enhance the reshoring of a greater share of their manufacturing activities within the U.S., aligning with a previously articulated objective 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 penalize these firms if “they can’t get parts.” A coalition of various international automobile manufacturers indicated that the order offered a degree of respite; however, they asserted that additional measures are necessary to bolster the sector. In a separate statement, U.S. Commerce Secretary Howard Lutnick informed CNBC that an agreement on trade had been established 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 intends to establish a series of tailored trade agreements.
The earnings calendar will feature results from software giant Microsoft and Facebook-owner Meta Platforms after the markets close. The companies are part of a slew of “Magnificent Seven” mega-cap tech players set to report this week, with iPhone-maker Apple and e-commerce titan Amazon scheduled to unveil earnings after the bell on Thursday. These groups have propelled markets upward in recent years; however, they have predominantly lagged in performance thus far this year.
Executives are expected to face inquiries regarding their substantial investments in artificial intelligence, particularly in light of the recent 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. Elsewhere on Wednesday, chipmaker Qualcomm and construction equipment group Caterpillar will also report.
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 projected to have decelerated to 0.2% from 2.4% in the final three months of 2024. “Details of the report, particularly regarding consumer spending, will be pivotal for the market’s response,” analysts at ING noted in a communication to clients.
In the interim, the release of the personal consumption expenditures price index is anticipated. 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 assessment of private payrolls is scheduled for the calendar as well. According to the forthcoming report from payrolls processor ADP, it is anticipated that private employers increased their workforce by 114,000 positions in April, a decline from the 155,000 jobs added in the previous month. All of the data points could serve as early indicators of whether Trump’s tariffs are impacting the broader economy — a scenario that has been forecasted by numerous economists.
Oil prices declined 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 decrease 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 outlook.