President Donald Trump posted late yesterday that a news conference would be held today “with representatives of a big, and highly respected, country” about a trade deal, with reports suggesting this could be the UK.
If it goes through, the trade agreement would be the first since the US paused the tariffs it had imposed on world economies last month.
The news followed indications from the administration that negotiations were underway with partners, but the markets are yet to see anything concrete on that front.
“Given that full trade deals take years to negotiate, this will likely be a framework, and it will be interesting to see whether the 10% baseline tariff stays,” Deutsche Bank strategists led by Jim Reid said.
Officials said earlier in the week that representatives from the US and China would meet over the weekend in Switzerland for “ice-breaker” trade discussions after weeks of tit-for-tat tariffs that have sparked worries about global economic growth.
Trump’s erratic trade policies and lack of clarity on the implementation of tariffs have left investors, consumers and the US Federal Reserve (Fed) in a wait-and-watch mode.
Yesterday, the US central bank held interest rates steady and flagged heightened risks of inflation and unemployment, further clouding the economic outlook for the world’s biggest economy.
At the Fed’s meeting, chair Jerome Powell said it was unclear what an appropriate monetary policy response was at the moment, reiterating the central bank’s dependence on data.
Traders now see a rate cut only by September and are pricing in a total of 75 basis points of lowering by 2025-end, according to data compiled by LSEG.
“The Fed has always described itself as being data-dependent, so it should not stall rate cuts due to Trump’s tendencies to use tariff threats as a method to negotiate,” said Eric Sterner, CIO at Apollon Wealth Management.
At 5.25am, Dow E-minis were up 305 points, or 0.74%, S&P 500 E-minis were up 55.75 points, or 0.99%, and Nasdaq 100 E-minis were up 272.75 points, or 1.37%.
Semiconductor stocks built on gains from the previous session. Nvidia was up 1.6% in premarket trading, Broadcom rose 2.4% and Advanced Micro Devices advanced 1.9%.
Chip stocks buoyed Wall Street to a higher close yesterday after a spokesman said the Trump administration was planning to rescind and modify a rule that curbed the export of sophisticated artificial-intelligence chips.
As markets move toward the close of earnings season, the outlook for companies remains a top priority to gauge how they plan to navigate tariff-induced uncertainty.
Warner Bros Discovery, Shopify and ConocoPhillips are among the names scheduled to report results before markets open.
US-listed shares of Arm plunged 9.6% after the chipmaker forecast first-quarter revenue and profit below Wall Street estimates.
Fortinet slumped 8.6% after the cybersecurity firm’s second-quarter revenue forecast came in below estimates.