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Stocks were headed for losses on Wednesday after a plan by China and the U.S. to get trade negotiations back on track left investors feeling underwhelmed. Inflation data later in the morning could test the recent global rally.
Futures tracking the Dow Jones Industrial Average fell 80 points, or 0.2%. S&P 500 futures dropped 0.3%, and contracts tied to the tech-heavy Nasdaq 100 slipped 0.2%.
The three blue-chip indexes edged higher on Tuesday as Wall Street awaited news from the London trade talks. But while Beijing and Washington said they had agreed on a framework to ratchet down tensions, they didn’t share in full what they’d agreed to, leaving the market searching for more clarity.
“If you’re looking for details then, sadly, they are incredibly thin on the ground,” Michael Brown, strategist at the foreign exchange brokerage Pepperstone, said. “Still, my base case of peak chaos being behind us remains intact, with the direction of travel on the issue of trade clearly remaining towards calmer heads, cooler rhetoric, and deals being struck.”
The other event that could move the market on Wednesday is the consumer price index inflation report for May. Economists expect inflation to quicken to 2.5% from 2.3%, according to a FactSet poll. A bigger uptick could make it tougher for the Federal Reserve to justify cutting interest rates at all this year, which would likely weigh on stock prices.
The yield on the benchmark 10-year Treasury note climbed by 1 basis point to 4.49% on Wednesday. Gold climbed 0.5% and the U.S. Dollar Index, which tracks the greenback against a weighted basket of six other currencies, was up 0.1%.
