Stock Index Futures Climb on U.S.-China Trade Talk Optimism, Fed Rate Decision in Focus

June S&P 500 E-Mini futures (ESM25) are up +0.58%, and June Nasdaq 100 E-Mini futures (NQM25) are up +0.64% this morning as optimism around U.S.-China trade talks boosted sentiment.

U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer will head to Switzerland on Thursday for trade negotiations with China, led by Vice Premier He Lifeng, fueling optimism that tensions between the world’s two largest economies may be easing. The trip was disclosed in statements issued Tuesday by both the Chinese and U.S. governments. It will mark the first confirmed trade talks between the nations since U.S. President Donald Trump imposed steep tariffs of 145% on China, which were met with retaliatory duties of 125% from Beijing.

Investor focus is now on the Federal Reserve’s policy decision and Chair Jerome Powell’s comments.

In yesterday’s trading session, Wall Street’s three main equity benchmarks closed in the red. Moderna (MRNA) plunged over -12% and was the top percentage loser on the S&P 500 after the U.S. FDA appointed Vinay Prasad, a prominent critic of the drug industry and COVID-19 boosters, to lead the agency’s vaccine regulation division. Also, Palantir Technologies (PLTR) tumbled more than -12% and was the top percentage loser on the Nasdaq 100 after the data analytics company’s Q1 results fell short of investors’ loftiest expectations. In addition, Vertex Pharmaceuticals (VRTX) slumped over -10% after the drugmaker reported weaker-than-expected Q1 results. On the bullish side, Upwork (UPWK) soared more than +18% after the platform for freelancers posted upbeat Q1 results.

Economic data released on Tuesday showed that the U.S. trade deficit was a record -$140.50B in March, wider than expectations of -$136.80B.

“You have Trump, who’s locked in on tariffs; you have the Fed, who’s locked in on not cutting rates. That’s not good for the stock market,” said Paul Tudor Jones, founder of macro hedge fund Tudor Investment Corp.

Today, all eyes are focused on the Federal Reserve’s monetary policy decision later in the day. The Federal Open Market Committee is widely expected to keep the Fed funds rate unchanged in a range of 4.25% to 4.50%, despite recent pressure from President Trump to cut interest rates. Market watchers will closely follow Chair Jerome Powell’s post-policy meeting press conference for clues on the path ahead. However, economists stated that Powell is unlikely to provide specific details about the policy-setting FOMC’s plans.

“We expect the main message from Chair Powell’s press conference to be that the Committee is well-positioned to wait for greater clarity before making any changes to policy,” said Michael Feroli, J.P. Morgan’s chief U.S. economist.

First-quarter corporate earnings season rolls on, and investors await new reports from high-profile companies today, including The Walt Disney Company (DIS), Uber Technologies (UBER), Arm Holdings (ARM), MercadoLibre (MELI), Applovin (APP), and Fortinet (FTNT). According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +6.7% increase in quarterly earnings for Q1 compared to the previous year.

On the economic data front, investors will focus on U.S. Consumer Credit data, which is set to be released later today. Economists, on average, forecast that March Consumer Credit will stand at $9.80B, compared to the previous figure of -$0.81B.

U.S. Crude Oil Inventories data will be released today as well. Economists expect this figure to be -1.700M, compared to last week’s value of -2.696M.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.329%, up +0.25%.

The Euro Stoxx 50 Index is down -0.23% this morning as investors assess global trade developments and a fresh batch of corporate earnings reports, with the focus now turning to the Fed’s rate decision. Healthcare stocks underperformed on Wednesday, remaining pressured by U.S. President Donald Trump’s Monday announcement that tariffs targeting the sector would be unveiled within the next two weeks. Novo Nordisk’s downward revision of its full-year sales guidance put further pressure on the sector. Data from Eurostat released on Wednesday showed that Eurozone consumers scaled back spending in March, reflecting increasing concerns over impending U.S. trade tariffs. Separately, data from the Federal Statistical Office showed that Germany’s monthly factory orders rose much more than expected in March, driven by U.S. stockpiling of goods ahead of tariffs imposed by the Trump administration the following month. Meanwhile, investor sentiment in the region was subdued as optimism over U.S.-China trade talks was overshadowed by concerns about potential European Union tariff retaliation. Bloomberg reported on Tuesday that the EU is preparing to impose additional tariffs on roughly 100 billion euros ($113 billion) worth of U.S. goods if ongoing trade talks fail to produce a satisfactory outcome for the bloc. In corporate news, Ambu A/S (AMBUB.C.DX) plunged over -12% after the Danish medical equipment maker reported weaker-than-expected FQ2 results. At the same time, Novo Nordisk A/S (NOVOB.C.DX) climbed more than +5% after the pharmaceutical giant posted better-than-expected Q1 profit.

Germany’s Factory Orders and Eurozone’s Retail Sales data were released today.

The German March Factory Orders stood at +3.6% m/m, stronger than expectations of +1.4% m/m.

Eurozone March Retail Sales came in at -0.1% m/m and +1.5% y/y, compared to expectations of -0.1% m/m and +1.6% y/y.

Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.80%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.14%.

China’s Shanghai Composite Index ended higher today as Beijing’s rollout of a slew of easing measures and plans for trade talks between China and the U.S. boosted sentiment. Bank and property stocks led the gains on Wednesday. The benchmark index, however, closed well below its intraday high as the latest positive news prompted some profit-taking. The People’s Bank of China cut the seven-day reverse repurchase rate to 1.4% from 1.5%, effective Thursday, and announced that banks’ reserve requirement ratio would be lowered by half a percentage point on May 15th. Also, Wu Qing, chairman of the China Securities Regulatory Commission, stated at a press conference that the regulator will take a more flexible stance toward listed companies significantly affected by the U.S. tariffs, permitting them to raise capital through equity pledges and refinancing. In addition, Li Yunze, head of the National Financial Regulatory Administration, announced that China will allow an additional 60 billion yuan ($8.31 billion) from long-term insurance funds to be invested in equities. The announcements came shortly after U.S. and Chinese officials said that U.S. Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet with China’s top economic official, He Lifeng, in Switzerland this weekend for trade negotiations. In corporate news, Harbin Dongan Auto Engine climbed over +5% after reporting increases in sales and production of its engines and transmissions in April.

Japan’s Nikkei 225 Stock Index closed slightly lower today as tariff concerns overshadowed optimism surrounding the upcoming U.S.-China trade talks. Pharmaceutical stocks led the declines on Wednesday after U.S. President Donald Trump announced he would unveil tariffs on drugs within the next two weeks. Also, automobile stocks slumped amid a stronger yen. At the same time, shares of Japanese trading houses climbed after Warren Buffett said he anticipates Berkshire Hathaway will hold its investments in them for 50 years or longer. Meanwhile, investors were also cautious ahead of the conclusion of the Federal Reserve’s two-day policy meeting later in the day. On the economic front, a business survey released on Wednesday showed that Japan’s service sector activity rebounded in April after stagnating the previous month, supported by stronger orders, in sharp contrast to ongoing weakness in the manufacturing sector. In corporate news, Torii Pharmaceutical surged over +6% after the Nikkei reported that Shionogi plans to acquire the company for about 150 billion yen ($1.01 billion). The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +11.63% to 29.85.

The Japanese April au Jibun Bank Services PMI stood at 52.4, stronger than expectations of 52.2.

Pre-Market U.S. Stock Movers

Advanced Micro Devices (AMD) rose over +1% in pre-market trading after the semiconductor giant posted better-than-expected Q1 results and issued solid Q2 revenue guidance.

Electronic Arts (EA) climbed more than +5% in pre-market trading after the videogame developer posted upbeat FQ4 results and provided strong FY26 net bookings guidance.

Honeywell (HON) gained over +2% in pre-market trading after BofA upgraded the stock to Buy from Neutral with a price target of $250.

Super Micro Computer (SMCI) slid more than -4% in pre-market trading after the AI server maker cut its full-year revenue guidance.

Sarepta Therapeutics (SRPT) plummeted over -20% in pre-market trading after the company cut its full-year product revenue guidance.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Wednesday - May 7th

Uber Tech (UBER), Walt Disney (DIS), Arm (ARM), MercadoLibre (MELI), Applovin (APP), Fortinet (FTNT), Emerson (EMR), Johnson Controls (JCI), Cencora Inc (COR), Carvana (CVNA), Manulife Financial (MFC), Vistra Energy (VST), Axon Enterprise (AXON), Flutter Entertainment (FLUT), Corteva (CTVA), Verisk (VRSK), Occidental (OXY), Barrick Gold (GOLD), Texas Pacific (TPL), Rockwell Automation (ROK), Atmos Energy (ATO), Fortis Inc (FTS), CDW Corp (CDW), RB Global (RBA), NiSource (NI), TPG Inc (TPG), Fidelity Financial (FNF), Zillow Group (ZG), Trimble (TRMB), Flex (FLEX), Bentley (BSY), CF Industries (CF), Western Midstream Partners (WES), Curtiss-Wright (CW), Symbotic (SYM), Paycom Soft (PAYC), Performance Food Group Co (PFGC), Entegris (ENTG), Owens Corning (OC), Royal Gold (RGLD), Houlihan Lokey Inc (HLI), YPF Sociedad Anonima (YPF), Jones Lang LaSalle (JLL), Coherent (COHR), Bunge (BG), Skyworks (SWKS), Amdocs (DOX), Permian Resources (PR), Dayforce (DAY), Qiagen (QGEN), Unity Software (U), Primerica (PRI), Genpact (G), NewYork Times (NYT), MarketAxesss (MKTX), Tetra Tech (TTEK), H&R Block (HRB), Light Wonder (LNW), Bio-Techne (TECH), Kyndryl Holdings (KD), Lantheus Holdings Inc (LNTH), Middleby Corp (MIDD), Revolution Med (RVMD), Axalta Coating Systems (AXTA), UGI (UGI), Watts Water Technologies (WTS), Owl Rock Capital (OBDC), IONQ (IONQ), Blackstone Secured Lending Fund (BXSL), BorgWarner (BWA), Kinetik Holdings (KNTK), Vertex (VERX), Bruker (BRKR), Jackson Financial (JXN), Energy of Minas Gerais (CIG), Charles River Laboratories (CRL), APA Corp (APA), Informatica (INFA), ADMA Biologics Inc (ADMA), Dutch Bros (BROS), Kratos Defense&Security (KTOS), FS KKR Capital (FSK), Amentum Holdings LLC (AMTM), Southwest Gas Hold (SWX), Joby Aviation (JOBY), Q2 Holdings (QTWO), MKS Instruments (MKSI), Elanco Animal Health (ELAN), F G Annuities Life (FG), Icahn Enterprises (IEP), Bgc Group (BGC), INTL FCStone (SNEX), Osisko Gold Ro (OR), Black Hills (BKH), Ormat (ORA), GXO Logistics (GXO), Geo (GEO), Cleveland-Cliffs (CLF), Remitly Global (RELY), ESCO Technologies (ESE), B2Gold (BTG), Rhythm Pharma (RYTM), Copa (CPA), Kemper (KMPR), Sitime Corp (SITM), Acushnet Holdings (GOLF), Soleno Therapeutics (SLNO), EPR Properties (EPR), Coeur Mining (CDE), Verra Mobility (VRRM), BBB Foods (TBBB), Avis (CAR), Perrigo (PRGO), Brighthouse Financial (BHF), Avista (AVA), Oscar Health (OSCR), Ultrapar Participacoes (UGP), Hannon Armstrong Sustainable (HASI), Murphy Oil (MUR), Goodyear Tire & Rubber Co (GT), American States Water (AWR), Equinox Gold (EQX), Chesapeake Utilities (CPK), Burford (BUR), Hagerty (HGTY), Kodiak Gas Services (KGS).