President Donald Trump confirmed the extension of the China tariff pause, as announced in a joint statement released by the U.S. and China.
Major U.S. stock futures were mixed late Monday, as the July consumer price inflation report has kept traders on the sidelines while they wait for one of the key pieces of the rate outlook puzzle.
President Donald Trump confirmed the extension of the China tariff pause, as announced in a joint statement released by the U.S. and China. The two countries have decided to extend the pause on tariffs by 90 additional days, starting on Aug. 12.
“I have just signed an Executive Order that will extend the Tariff Suspension on China for another 90 days. All other elements of the Agreement will remain the same,” the president said in a post on his Truth Social account.
As of 10:20 a.m. ET on Monday, the Dow futures rose 0.06%, the S&P 500 futures were little changed, and the Russell 2000 futures rose 0.22%, while the Nasdaq 100 futures traded down 0.12%.
On Monday, the major indices closed modestly to moderately lower after holding above the unchanged line earlier in the day as traders weighed in the U.S.-China trade truce extension and reports of the U.S. demanding 15% of China revenue from Nvidia (NVDA) and AMD (AMD) in exchange for granting export licenses to them.
Most S&P 500 sector classes declined in the session, with the exceptions of consumer and healthcare stocks.
The Invesco QQQ Trust (QQQ), an exchange-traded fund (ETF) that tracks the Nasdaq 100 Index, ended down 0.30%, and the SPDR S&P 500 ETF (SPY) fell 0.20%. The SPDR Dow Jones Industrial Average ETF Trust (DIA) and iShares Russell 2000 ETF (IWM) declined 0.43% and 0.02%, respectively.
The all-important consumer price inflation report for July is scheduled for release at 8:30 a.m. ET, with most economists expecting a slight tick down in the monthly rate but a pickup in the other major rates.
Richmond Federal Reserve President Tom Barkin and his compatriot at the Kansas City Fed, Jeff Schmid, are due to make public appearances at 10 a.m. ET. The Treasury is set to announce its monthly federal budget for July at 2 p.m. ET.
Notable companies reporting earnings for the day are Cardinal Health (CAH), Circle Internet Group (CRCL), eToro (ETOR), Smithfield Foods (SFD), Tencent Music (TME), Cava Group (CAVA), CoreWeave (CRWV), and H&R Block (HRB).
Ahead of Tuesday’s inflation report, Morgan Stanley’s Chief Equity Strategist said the firm is bullish on a six-to-12-month time horizon due to a rebounding earnings and cash flow environment.
The focus, according to the strategist, is now on the July inflation print. “A hot print likely means quality leadership, while a light print could mean small caps & lower quality stocks gain more durable footing.”
Wilson said Morgan Stanley models the tariff-induced inflation to subside later this year, with the monthly rate of the core CPI likely peaking in August and paving the way for a significant rate-cutting cycle. “This is supportive of our constructive longer-term outlook for US stocks,” he added.
Crude oil futures rose modestly in overnight trading, while gold futures traded flat after declining on Monday, as Trump ruled out imposing tariffs on the yellow metal.
The U.S. dollar was slightly weaker against most major currency counterparts except the yen. The 10-year Treasury note yield edged up in overnight trading.
Major Asian markets traded on a mixed note Tuesday morning, although the Japanese stock market gauge, the Nikkei 225 average, hit a new high amid easing tariff worries.
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