Dow Futures are on the rise, supported by reports of an upcoming meeting between U.S. and Chinese officials, which may represent an initial move towards alleviating the persistent trade tensions between the two largest economies globally. Attention is directed towards the impending decision by the Federal Reserve regarding interest rates, along with any indications the central bank might provide concerning its future policy trajectory. AMD’s current-quarter revenue guidance exceeds estimates; however, the semiconductor sector indicates a significant impact from the recent U.S. chip export regulations. U.S. stock futures indicated a positive trajectory on Wednesday, as market participants evaluated the impending trade discussions between U.S. and Chinese officials.
Markets were anticipating the forthcoming monetary policy decision from the Fed, with particular attention on the central bank’s potential indications regarding its interest rate trajectory. The Dow Futures contract experienced an increase of 218 points, representing a rise of 0.5%. Meanwhile, S&P 500 futures saw an uptick of 32 points, equivalent to 0.6%, and Nasdaq 100 futures advanced by 132 points, marking a 0.7% gain.
On Tuesday, the primary indices on Wall Street experienced a decline, influenced in part by U.S. President Donald Trump’s remarks regarding recent trade negotiations. During a meeting with Canadian Prime Minister Mark Carney, Trump indicated that the U.S. is not obligated to sign deals, asserting that other countries “have to sign deals with us”. Early last month, Trump implemented stringent new tariffs on a variety of countries, but subsequently postponed the majority of these levies for 90 days due to significant disruptions in the stock and bond markets. White House officials have been assigned the responsibility of negotiating a series of individual trade agreements prior to the implementation of increased tariffs in July.
U.S. Treasury Secretary Scott Bessent is scheduled to meet with Chinese Vice Premier He Lifeng, who is recognized as Beijing’s primary envoy for economic and trade issues, this week for discussions. Bessent expressed anticipation for “productive talks as we work towards rebalancing the international economic system towards better serving the interest of the United States”.
According to a statement from China, Reuters has reported that an agreement has been reached for a meeting between Bessent and chief U.S. trade negotiator Jamieson Greer in Switzerland this weekend. Beijing has indicated its intention to “re-engage” with the U.S., yet it has cautioned that it will “never agree” to any agreement if officials from the Trump administration seek to “use talks as a cover to continue coercion and blackmail”. The world’s second-largest economy has been excluded from Trump’s tariff postponement and is presently contending with extensive U.S. tariffs amounting to a minimum of 145%. China, which has enacted retaliatory tariffs of 125% on U.S. imports, has emerged as a focal point of Trump’s tariff strategy, with the president asserting that the nation is a “candidate for the ’chief-ripper-offer’ on trade”. China has issued its own intense rhetoric, escalating tensions with Washington.
The Federal Reserve is widely anticipated to maintain the current interest rates following its recent two-day meeting on Wednesday, drawing attention to any signals it may provide regarding future policy decisions later in the year. In light of persistent pressure from Trump to reduce interest rates, the central bank has indicated a preference for a “wait-and-see” strategy regarding any forthcoming adjustments to borrowing costs. Officials have expressed caution regarding the uncertainty surrounding the effects of Trump’s tariffs on the economy, particularly in relation to inflation and employment levels.
Policymakers will be contending with somewhat ambiguous economic data. Despite the contraction in U.S. gross domestic product during the first quarter, consumer spending continues to demonstrate strength, and the labor market has shown remarkable resilience. However, as the next set of rate forecasts from officials is not expected until June, focus will likely shift to Fed Chair Jerome Powell’s press conference following the decision for potential insights. Additional emphasis might be directed toward possible remarks from Powell regarding the Fed’s autonomy. Trump has expressed dissatisfaction with Powell for not exerting more effort to lower interest rates, although he has stated that he has no intentions of removing the Fed leader.
Shares in Advanced Micro Devices edged higher in extended hours trading on Wednesday following the chipmaker’s announcement of second-quarter revenue guidance that surpassed Wall Street estimates. Analysts indicated that the positive outlook for the current quarter was probably influenced by numerous clients hastening to secure purchases ahead of the introduction of U.S. tariffs. AMD is contending with recent U.S. restrictions on the export of advanced artificial intelligence processors to China, which poses a significant challenge in a vital market for the company. The firm anticipates a $1.5 billion reduction in sales this year due to the export restrictions, with CEO Lisa Su indicating that the effects will be most pronounced in the second and third quarters. Nonetheless, Su anticipates that annual AI chip revenue from its data center unit will increase in the “double digits”.
Elsewhere on Wednesday, several groups are anticipated to report their latest results, including ride-hailing firm Uber Technologies, entertainment behemoth Walt Disney, and chip designer Arm Holdings.
Gold prices declined following the announcement of trade discussions between U.S. and Chinese officials, which enhanced risk appetite and diminished safe-haven inflows, while the dollar strengthened ahead of the Fed’s decision. The yellow metal experienced a modest increase this week, approaching record highs as uncertainty surrounding U.S.-China trade tensions heightened demand for safe-haven assets. However, this trend seemed to have shifted somewhat on Wednesday. Spot gold experienced a decline of 1.3%, settling at $3,386.97 per ounce, whereas gold futures for June decreased by 0.8%, reaching $3,395.86 per ounce. Meanwhile, oil prices increased, moving away from four-year lows due to trade optimism and indications of robust demand in the world’s largest consuming nation. U.S. crude stocks decreased by 4.5 million barrels in the week ending May 2, as reported by the American Petroleum Institute on Tuesday, suggesting that demand continues to be robust. Official U.S. government data from the Energy Information Administration is expected to be released later in the session.