Wall Street opens higher as traders eye Fed decision, US-China trade talks

Time of India

07-05-2025

US stock markets opened modestly higher on Wednesday, with investors treading cautiously ahead of a critical Federal Reserve interest rate decision and renewed trade negotiations between the US and China.At 9:45 a.m. GMT-4, the Dow Jones Industrial Average (DJIA) rose 238 points or 0.58% to 41,067, while the S&P 500 gained 20.52 points or 0.37% to reach 5,627.43. The Nasdaq Composite advanced 54.59 points or 0.31% to 17,744.25.Despite gains in equities, gold prices slipped as geopolitical tensions showed early signs of easing, with the metal dropping $26.20 or 0.77% to $3,396.60 per ounce. Oil also edged down $0.38 to $58.71 per barrel, continuing a modest decline amid demand concerns.Bond yields held steady, with the 10-year US Treasury yield at 4.297%, down slightly by 0.021 percentage points. The VIX volatility index rose marginally to 24.84, reflecting a measured level of market caution. Meanwhile, the euro traded at $1.135, slightly weaker against the dollar.Meanwhile, Futures for the S&P 500 and Nasdaq composite rose 0.6%, while Dow Jones Industrial Average futures climbed 0.7%.Walt Disney Co. surged over 6% in premarket trading after reporting better-than-expected quarterly earnings. Revenue rose 7% year-on-year, with 2.5 million new subscribers added to Disney+ and Hulu.The results came shortly after Trump criticized foreign-made films, authorizing import taxes on international productions.Electronic Arts also gained more than 5% after its preliminary quarterly results beat analysts' expectations for both sales and profit.Despite strong earnings from some firms, the uncertainty from escalating tariffs has impacted business outlooks. Some companies have issued dual earnings forecasts — one assuming higher tariffs and another without them — reflecting the market's volatility.Federal Reserve Chair Jerome Powell is expected to maintain current rates, with officials wanting more data on how tariffs — including 145% duties on all Chinese imports — are affecting the economy.Concerns around tariffs have influenced household sentiment and led to a spike in imports. The US trade deficit hit a record $140.5 billion in March, with businesses and consumers accelerating purchases ahead of further tariff hikes.In Europe, midday trading was mixed with Germany's DAX flat, the CAC 40 in France down 0.6%, and the UK's FTSE 100 off 0.4%.Asian shares mostly rose as the US and China scheduled trade talks in Switzerland. Hong Kong's benchmark briefly jumped over 2% on fresh stimulus from Beijing aimed at countering the impact of US tariffs, though gains moderated later. The Hang Seng ended up just 0.1%, while Tokyo's Nikkei slipped 0.1%. Shanghai's Composite Index gained 0.8%.ING Economics' Lynne Song noted that China's easing measures were likely preemptive, intended to appear strategic rather than reactive to trade pressures. However, analysts expressed disappointment over limited fiscal support in Beijing's package.Australia's S&P/ASX 200 rose 0.3%, and South Korea's Kospi added 0.6%.In commodities, US crude oil increased 48 cents to $59.57 per barrel, while Brent crude rose 40 cents to $62.55.The dollar strengthened to 143.34 yen from 142.41 yen. The euro slipped slightly to $1.1365.