These are the early headlines and other items poised to influence the market at the start of the trading day. As we share this collection of market drivers, U.S. equity futures point to a mixed market open. Similar to Tuesday, we’ll want to revisit equity futures once the market digests Wednesday’s April PPI report out at 8:30 a.m. ET.
1. President Donald Trump said he would urge China’s Xi Jinping to “open up” to U.S. business on his way to a summit in Beijing on Wednesday, adding Nvidia’s Jensen Huang to a group of CEOs travelling with him when he stopped in Alaska en route… The CEOs accompanying Trump are drawn mainly from companies seeking to resolve business issues with China, such as Nvidia, which has struggled to get regulatory permission to sell its powerful H200 artificial intelligence chips there. (Reuters)
2. U.S. President Donald Trump said on Tuesday he does not think he will need China’s help to end the war with Iran, even as hopes for a lasting peace deal dwindled and Tehran tightened its grip over the Strait of Hormuz. (Reuters)
The United States could end the month-old cease-fire and resume its attacks on Iran, President Trump and Defense Secretary Pete Hegseth said on Tuesday, a day after Mr. Trump dismissed Tehran’s latest offer to end the war as “garbage.” (NY Times)
This adds to our thinking that President Trump’s meeting with China’s Xi Jinping will be as much about opening markets to U.S. companies as geopolitical and trade/tariff negotiations. However, with 45% to 50% of China’s crude oil imports and a significant portion of its liquid natural gas impacted by the closure of the Strait of Hormuz, the U.S.-Iran war may not be pushed aside so easily. This could present something of a chicken and egg problem for Trump and Xi and argues for tempered summit outcome expectations.
3. Inflation rates may continue to outrun wage growth for the near future, economists said following the release of Tuesday’s data. Many employees and job seekers don’t have a lot of leverage when it comes to their pay — and we’re in a time of high prices. (MarketWatch)
Following Tuesday’s warmer than expected April CPI report, at 8:30 a.m. ET the April Producer Price Index will be released. Market expectations see the headline figure rising a hefty 4.9% up from 4% in March. That would accelerate the climb that began with February’s 3.4% print. Core PPI in April is expected to top 4%, coming in at 4.3% versus the 3.8% registered for March.
Given the big jumps we’ve seen in ISM PMI pricing figures over the last few months and comments about rising input and output costs, the flow-through of those findings and the combined March-April PPI data points to more pronounced consumer facing inflation ahead. We’ll not only stick with our positions in Costco (COST) and TJX (TJX), we’ll look to add to them where it makes sense.
4. Chinese suppliers to major US retailers like Walmart Inc. and Costco Wholesale Corp. said they are hiking prices for the first time in years as raw material costs soar just as factories ramp up production for Christmas. According to interviews with more than a dozen suppliers over the past two weeks, the increases vary depending on the product and type of customer. Chinese manufacturers are raising prices by up to about 5% for some products for big box retailers, according to five of the people, and the increases go up to 15% for smaller merchants… (Bloomberg)
While you may be thinking “it’s a wee bit early to be talking about Christmas,” companies are already working through timelines and product lead times to have merch on shelves for the holiday shopping season. While expectations for the year-end holiday shopping season won’t emerge until late September or early October, the tea leaves are suggesting that the number of gifts that shoppers purchase could be smaller compared to the last few years.
Between now and then, we’ll continue to track the delta between inflation and wage data to get a handle on disposable income and consumer spending prospects. And yes, this backs our view on not only COST and TJX but keeps us bullish on Amazon (AMZN) in general but also ahead of its 2026 Prime Day and its 2026 Prime Big Deal Days events.
5. AI infrastructure orders taken from hyperscalers totaled $2.1 billion in Q2 compared to $1.3 billion just last quarter and equal to the total orders taken in all of fiscal year ’25, marking another significant acceleration in growth across our silicon, systems and optics…. Total RPO was $43.4 billion, up 5%. Product RPO grew 8%, of which the long-term portion was $11.8 billion, up 11%. Total ARR ended the quarter at $31 billion, an increase of 3% with product ARR growth of 6%. (Cisco Investor Relations)
Those were some of the metrics Cisco (CSCO) shared when it reported its most recent quarterly results. When the company reports after Wednesday’s market close, we will be focusing on its comments about networking demand, AI infrastructure orders and hyperscaler spending and similar comments for neocloud, sovereign, and enterprise customers.
The proof will be in the RPO pudding as we, and others, asses the sequential move in Cisco’s total RPO figure. We’ll be tying what we learn back to the Portfolio’s positions that are benefitting from AI and data center infrastructure demand.
6. Cloud computing provider Nebius Group NV reported a 684% jump in first quarter sales on increased demand for its data centers… Nebius competes with CoreWeave Inc. and a range of neo-cloud startups that rent out computing resources to artificial intelligence developers. (Bloomberg)
That certainly sets the stage for Cisco’s quarterly results tonight, as does Nebius’s guidance for $7 billion to $9 billion in revenue for this year following the $1.9 billion booked in Q1 2026. In the company’s shareholder letter, management shared the company has already contracted more than 3.5 GW in capacity, the goal it set for 2026.
7. Economic data today per TipRanks: MBA Mortgage Applications Index (Weekly), Producer Price Index (April), EIA Crude Oil Inventories (Weekly).
8. Companies reporting today per TipRanks: AM – Alibaba (BABA), Birkenstock (BIRK), Tower Semiconductor (TSEM), Vishay (VSH). PM – Cisco (CSCO), Grocery Outlet (GO), Jack in the Box (JACK), StubHub (STUB).
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At the time of publication, TheStreet Pro Portfolio was long COST, TJX and AMZN shares.
