US stock futures edge higher as S&P 500 eyes fifth gain on China tariff truce, cooling inflation, and Fed cut bets
US
Stock Futures Rise
as S&P 500 Eyes Fifth Straight Gain on Tariff Relief, Lower Inflation-
Stock futures rose Friday morning, pointing to a positive open as investors digest easing trade tensions between the U.S. and China and soft inflation data. The S&P 500 is now aiming to extend its winning streak to five days.
Futures tied to the Dow Jones Industrial Average gained 111 points, or about 0.3%. S&P 500 futures were up 0.2%, while Nasdaq-100 futures added 0.2% as well. This comes after several days of market optimism sparked by a 90-day pause on new tariffs from both the U.S. and China, as well as a cooler-than-expected inflation report.
Major indices at a
glance
S&P 500 (SPX):
Last close:
5,301.25
Futures:
+0.38%
On track for a fifth straight daily gain as risk appetite returns
Dow Jones Industrial Average (DJIA):
Last close:
39,908.00
Futures:
+0.32%
Gains tempered by weakness in retail and healthcare sectors
Nasdaq Composite (IXIC):
Last close:
16,742.39
Futures:
+0.52%
Tech leads the rally as bond yields ease and rate cut hopes grow
Investor caution
lingers
Despite the upbeat tone, investors remain wary:
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Walmart's earnings warning
raised concerns about consumer strength and retail sector margins.
Novo Nordisk's CEO departure
created uncertainty in healthcare markets.
Rate cut optimism
is tempered by caution ahead of upcoming Fed speeches and global macro risks.
Why are stock futures rising today?
Stock futures are up as the market reacts positively to this week's major headlines: easing trade tensions and improving inflation data. Earlier this week, officials from the U.S. and China agreed to a 90-day truce on new tariffs, signaling a temporary pause in what's been a major drag on global investor sentiment.
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The news has helped push stocks higher across the board. So far this week:
The S&P 500 has gained 4.5%
The Dow Jones Industrial Average is up 2.6%
The Nasdaq Composite has jumped more than 6%
Thursday's market move added to this trend. While the S&P and Dow closed slightly higher, the Nasdaq pulled back just a bit. Still, the overall mood remains positive.
What role did inflation data play in the rally?
A big boost came Thursday after a soft Producer Price Index (PPI) report showed wholesale prices fell 0.5% in April, easing fears of persistent inflation. This followed a consumer inflation report earlier in the week showing a 2.3% year-over-year increase in the Consumer Price Index (CPI) — the lowest since February 2021.
'This week has been a sigh of relief,' said Callie Cox, chief market strategist at Ritholtz Wealth Management. 'Investors are trying to assess what tariffs and inflation mean for the broader economy.'
With inflation cooling, the Federal Reserve could be in a better position to cut interest rates in the coming months. According to UBS, slowing economic growth and a weakening labor market might lead the Fed to cut rates by 100 basis points starting as early as September.
Are tariffs still a concern for companies like Walmart?
While the tariff truce is welcome news, not all is calm. Walmart warned Thursday it may raise prices on certain products in late May due to lingering tariff impacts. Despite the warning, Bill Simon, former U.S. CEO of Walmart, believes the retailer can handle the pressure.
'They're growing gross margins — up 25 basis points this quarter,' Simon told CNBC. 'That gives them room to absorb any additional costs from tariffs.'
Still, Cox cautioned that Walmart's update might be a warning sign of deeper economic strain. 'We're seeing these subtle hints that tariffs are affecting companies, but the market hasn't fully priced that in yet,' she said.
What economic data are traders watching next?
Markets are also awaiting fresh economic signals. On Friday, two key reports will be released:
Housing starts data, giving a look at construction activity
University of Michigan consumer sentiment survey, which will offer insight into how Americans are feeling about the economy
These updates could help clarify the direction of the economy and influence the Fed's next move on interest rates.
What's going on with Novo Nordisk and Constellation Brands?
In company news, Novo Nordisk shares dropped more than 3% in premarket trading after announcing CEO Lars Fruergaard Jørgensen will step down. The Wegovy maker has seen its stock cut in half over the past year, facing rising competition in the obesity drug market. A new CEO has not been named yet.
Meanwhile, Constellation Brands saw a 3% jump in its stock price after Warren Buffett's Berkshire Hathaway doubled its stake in the beer importer. The new stake is now worth around $2.2 billion, reflecting growing investor interest in the beverage company.
Will the Fed actually cut interest rates this year?
That's the big question. UBS's Solita Marcelli says the signs are pointing in that direction. 'Our base case is for 100 basis points of easing starting in September,' she wrote. Even if the U.S. avoids a full recession, slower growth and a weaker job market may give the Fed room to ease.
For now, investors appear optimistic. A five-day rally for the S&P 500, cooler inflation, and temporary tariff relief have calmed fears — at least temporarily.
FAQs:
What's pushing stock futures higher this week?
Easing U.S.-China tariffs and lower inflation reports are lifting stock futures.
Will the Fed cut interest rates soon?
UBS expects the Fed to begin rate cuts by September due to slowing growth.
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