US stock futures idled on Tuesday, with techs a bright spot as Wall Street kicked off a holiday-shortened week by focusing on a coming inflation report watched closely by the Federal Reserve.
S&P 500 futures (ES=F) were up 0.1%, while contracts on the tech-heavy Nasdaq 100 (NQ=F) added 0.2% after solid closing gains on Friday. Futures on the Dow Jones Industrial Average (YM=F), which lists fewer tech names, slipped 0.1%.
The major gauges are regrouping after a volatile week as traders return from the Memorial Day break. Stocks have been buffeted back and forth by two impulses: fading optimism for rate cuts on one hand, and high hopes for AI on the other. The latter is led by Nvidia (NVDA), whose shares continued a post-earnings tear, gaining 3% in premarket trading.
Investors are now firmly back on inflation watch, counting down to the release of the Federal Reserve’s preferred PCE gauge on Friday. Fed officials have sent out a drumbeat of warnings that data must show real cooling in inflation to trigger a policy shift, with Neel Kashkari the latest to join them.
Read more: How does the labor market affect inflation?
Those comments, alongside hotter-than-expected economic prints and hawkish Fed minutes, have prompted traders to once again scale back bets on interest rate cuts this year. Data chasers will get updates on first quarter GDP and consumer confidence later this week that could prove catalysts.
In other individual movers, GameStop (GME) stocks soared over 25% in pre-market trading. The games retailer on Friday said it had brought in not far off $1 billion from a share sale during the meme rally earlier in May. Meawnwhile, Apple (AAPL)rose almost 2% following data showing iPhone sales in China jumped over 50% in April as retail partners cut prices.
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EvercoreISI’s take on Trump 2.0 tariffs
We have started to see Wall Street crunch the numbers on the economic impact of the new tariffs that President Trump would be keen on implementing if he were to win a second term.
Today EvercoreISI weighs in with its take:
“Presidents rarely enact or implement the full entirety of any campaign idea and Trump in particular likes to use bold ideas as a launching off. Nevertheless, it is critical to understand what a dramatic starting point Trump has put forward as that has implications for where we could ultimately land. Taken at face value, the combination of the proposed 10% across-the-board tariff and the 60% China tariff would lead to an overall U.S. weighted average tariff rate of nearly 17%, the highest since the 1930s Smoot-Hawley era. On a static basis (i.e., not assuming any dynamic economic effects), tariffs would rise from 0.3% of GDP to 1.9% of GDP – an increase of more than $400 billion annually. Such a dramatic move would almost certainly lead to major retaliation by trading partners.”
Are markets under-pricing a new Trump trade war? (EvercoreISI)
