Stocks rally as the U.S. and China are finally talking — with the Fed up next
U.S. stock futures climbed Wednesday morning as investors awaited the Federal Reserve's latest policy statement.
The S&P 500 and Nasdaq saw premarket gains of 0.68%, the Dow Jones Industrial Average gained 0.75%, and the small-cap Russell 2000 packed on 1%.
Fed on reciprocal pause?
When it announces its decision at 2 p.m., the Fed is widely expected to hold interest rates steady at 4.25% to 4.50%. The market has not anticipated rate changes for weeks now, with some analysts theorizing that the central bank plans to mirror Trump's 90-day tariff pause.
'The Federal Reserve is unlikely to lower rates this week or to act decisively until after July 8,' wrote Emily Bowersock Hill of Bowersock Capital Partners, arguing that Friday's robust jobs report gives the Fed additional cover to wait and watch.
Chinese confirm talks, U.K. deal 'breakthrough' rolls back
Chinese officials confirmed plans to meet Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer in Geneva from May 9–12. It's the first high-level dialogue since tariffs skyrocketed to 145% on Chinese goods and 125% on U.S. exports. While no breakthroughs are expected, both sides have signaled a willingness to de-escalate.
Elsewhere in trade news, the U.S. and U.K. are finalizing a trade deal that would roll back tariffs on British steel and car imports to pre-April levels. The agreement includes tariff quotas meant to cushion the blow from Trump's 25% hikes announced earlier this year. Though billed as a diplomatic win, the pact largely resets trade terms the U.S. had upended weeks ago.
Backlash to tariffs hits American brands in Europe
The European Central Bank says consumers across the continent are consciously avoiding U.S. products — not just because of cost, but out of protest, according to the New York Times. From boycotts of Levi's and Netflix (NFLX) to Tesla (TSLA), a slow-rolling rejection of American brands is taking hold. The ECB warns this shift may prove more permanent than political.
Disney and Uber in the earnings spotlight
On the earnings front, Disney (DIS) stock jumped 6% premarket after reporting quarterly EPS of $1.45, beating expectations by nearly 20%.
Uber (UBER), on the other hand, slipped about 6% premarket after missing earnings despite raising its Q2 revenue forecast on strong ride-hailing and delivery demand. For Q1, the company reported 18% growth in ride bookings year over year.
Wall Street picks up the shipping news
Finally, Wall Street is back to reading the shipping tea leaves, as reported by The Wall Street Journal. With tariff uncertainty clouding demand forecasts, traders are poring over freight data for signs of slowdown. China-to-U.S. bookings have plunged 60% since April 9, while truck orders fell to their lowest levels in months.
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