September S&P 500 E-Mini futures (ESU25) are trending down -0.09% this morning as investors digest the latest tariff headlines, while also awaiting crucial U.S. producer inflation data, quarterly reports from more big banks, and remarks from Federal Reserve officials.
U.S. President Donald Trump signaled on Tuesday that tariffs on pharmaceuticals could be implemented by the end of the month, with similar measures on semiconductors possibly following. “Probably at the end of the month, and we’re going to start off with a low tariff and give the pharmaceutical companies a year or so to build, and then we’re going to make it a very high tariff,” he told reporters. Trump also stated that letters informing smaller countries of their U.S. tariff rates would be sent out soon, adding that his administration would likely impose a tariff of “a little over 10%” on those nations. In addition, the president predicted that he could finalize “two or three” trade agreements with countries before his so-called reciprocal tariffs take effect on August 1st, noting that a deal with India was among the most likely.
In yesterday’s trading session, Wall Street’s major indexes closed mixed. State Street (STT) slumped over -7% and was the top percentage loser on the S&P 500 after Q2 results showed the company didn’t reduce expenses as much as analysts had expected and reported a decline in net interest income. Also, Wells Fargo (WFC) slid more than -5% after the San Francisco lender cut its full-year net interest income guidance. In addition, Newmont (NEM) dropped over -5% following the resignation of Chief Financial Officer Karyn Ovelmen. On the bullish side, Advanced Micro Devices (AMD) climbed more than +6%, and Nvidia (NVDA) rose over +4% to lead gainers in the Dow after the companies said they will resume some chip sales to China.
The U.S. Bureau of Labor Statistics report released on Tuesday showed that consumer prices rose +0.3% m/m in June, in line with expectations. On an annual basis, headline inflation picked up to +2.7% in June from +2.4% in May, slightly stronger than expectations of +2.6%. Also, the core CPI, which excludes volatile food and fuel prices, rose +0.2% m/m and +2.9% y/y in June, weaker than expectations of +0.3% m/m and +3.0% y/y. In addition, the Empire State manufacturing index unexpectedly rose to 5.50 in July, stronger than expectations of -8.30.
“The big question for the inflation picture is tariffs. It’s taking some time for tariffs to show up in the data, but it’s highly likely that a tariff-driven inflation reckoning is coming,” said Skyler Weinand at Regan Capital. “The Fed will want to watch the next several inflation and jobs reports before it makes any moves on rates.”
Richmond Fed President Tom Barkin said on Tuesday that the latest inflation data showed signs of building price pressures, and that more were on the way. Barkin added that it remains unclear how much of the tariffs companies could pass along to consumers, who may struggle to absorb additional price increases. Also, Boston Fed President Susan Collins said she still believes the central bank can afford to be patient when considering interest rate cuts. “Continued overall solid economic conditions enable the Fed to take the time to carefully assess the wide range of incoming data,” Collins said.
Meanwhile, U.S. rate futures have priced in a 97.4% chance of no rate change and a 2.6% chance of a 25 basis point rate cut at July’s monetary policy meeting. After the latest inflation data, traders priced in lower odds that the Fed will cut rates more than once this year, with the chances of a September move now viewed as only slightly above 50%.
Second-quarter corporate earnings season picks up steam, with investors awaiting reports today from major U.S. banks such as Bank of America (BAC), Morgan Stanley (MS), and Goldman Sachs (GS) as well as notable companies like Johnson & Johnson (JNJ), Progressive (PGR), and United Airlines Holdings (UAL). According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +2.8% increase in quarterly earnings for Q2 compared to the previous year, marking the smallest rise in two years.
On the economic data front, all eyes are focused on the U.S. Producer Price Index, which is set to be released in a couple of hours. Economists, on average, forecast that the U.S. June PPI will stand at +0.2% m/m and +2.5% y/y, compared to the previous figures of +0.1% m/m and +2.6% y/y.
The U.S. Core PPI will also be closely monitored today. Economists expect June figures to be +0.2% m/m and +2.7% y/y, compared to May’s numbers of +0.1% m/m and +3.0% y/y.
U.S. Industrial Production and Manufacturing Production data will be reported today. Economists anticipate Industrial Production to rise +0.1% m/m and Manufacturing Production to be unchanged m/m in June, compared to the May figures of -0.2% m/m and +0.1% m/m, respectively.
U.S. Crude Oil Inventories data will be released today as well. Economists expect this figure to be -1.800M, compared to last week’s value of 7.070M.
In addition, market participants will be looking toward speeches from Richmond Fed President Tom Barkin, Cleveland Fed President Beth Hammack, Fed Governor Michael Barr, and New York Fed President John Williams.
Later today, the Fed will release its Beige Book survey of regional business contacts, which provides an update on economic conditions in each of the 12 Fed districts. The Beige Book is published two weeks before each meeting of the policy-setting Federal Open Market Committee.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.478%, down -0.29%.
The Euro Stoxx 50 Index is down -0.32% this morning as investors digest a fresh batch of corporate earnings reports and remain focused on trade issues. Technology stocks plunged on Wednesday, pressured by a more than -8% drop in ASML Holding N.V. (ASML.NA) after the world’s largest supplier of chip-making equipment lowered its growth forecast for next year, citing trade tensions. Automobile stocks also slumped. Data from the Office for National Statistics released on Wednesday showed that Britain’s annual inflation rate unexpectedly rose to its highest level in over a year in June, likely prompting policymakers at the Bank of England to remain cautious despite a sluggish economy. Separately, final data from statistics agency Istat confirmed on Wednesday that Italy’s annual inflation rate rose to 1.7% in June from 1.6% in the previous month. In addition, data showed that Europe’s exports to the U.S. fell for the second straight month in May following a first-quarter surge, but remained above year-ago levels. Meanwhile, investors await clarity on U.S.-EU trade talks, as the bloc prepared retaliatory measures in case negotiations with Washington break down. Trump threatened a 30% tariff on most EU imports from August 1st over the weekend, a rate that analysts warn could push the Eurozone to the brink of recession. In other corporate news, Renault (RNO.FP) plummeted over -16% after the automaker cut its full-year guidance and named a new interim chief executive officer.
U.K.’s CPI, U.K.’s Core CPI, Italy’s CPI, and Eurozone’s Trade Balance data were released today.
U.K. June CPI rose +0.3% m/m and +3.6% y/y, stronger than expectations of +0.2% m/m and +3.4% y/y.
U.K. June Core CPI rose +0.4% m/m and +3.7% y/y, stronger than expectations of +0.2% m/m and +3.5% y/y.
The Italian June CPI rose +0.2% m/m and +1.7% y/y, in line with expectations.
Eurozone May Trade Balance came in at 16.2B euros, stronger than expectations of 13.9B euros.
Asian stock markets today closed in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.03%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.04%.
China’s Shanghai Composite Index ended slightly lower today as concerns persisted over trade relations with the United States. U.S. President Donald Trump stated on Tuesday that the country would fight China “in a very friendly fashion.” Morgan Stanley economists said in a note that, in their base case, they assume “the U.S. tariff rate on China would stay unchanged at 30% — but the recent escalation of U.S. tariffs on other economies is likely to further dampen global trade momentum.” Separately, Citi analysts said that the Trump administration’s focus on national security and strategic priorities is likely to keep U.S.-China relations strained. Meanwhile, China’s earnings season could also pose a risk to the fragile rebound in onshore stocks. Analysts said that the country’s corporate earnings growth likely slowed or stagnated in the second quarter as the U.S. ratcheted up trade tariffs, with guidance expected to be cautious amid intensifying price wars and a likely slowdown in economic growth in the second half of 2025. In other news, UBS lifted its 2025 China GDP growth forecast to 4.7% from 4%, but noted it expects a likely contraction in exports, continued property market weakness, and slowing consumption growth in the second half of the year. The latest batch of economic data from the country highlighted weak consumer demand at home and weakness in the property sector, potentially raising pressure on policymakers to roll out additional stimulus measures. Investor focus is now on the upcoming Politburo meeting, which is expected to guide economic policy for the remainder of the year.
Japan’s Nikkei 225 Stock Index closed just below the flatline today as worries over the upcoming Upper House election and the fate of trade talks with the U.S. kept sentiment subdued. Real estate and financial stocks led the declines on Wednesday. At the same time, chip-related stocks outperformed amid positive sentiment surrounding the easing of U.S. restrictions on chip exports to China. A Reuters Tankan poll showed on Wednesday that Japanese manufacturers’ business confidence rose slightly in July and is expected to improve further in the months ahead, despite ongoing concerns over U.S. tariffs, supported by a rebound in the semiconductor sector. Meanwhile, investors are cautiously awaiting the outcome of the upper house election scheduled for July 20th. A potential defeat for the ruling Liberal Democratic Party and its coalition partner Komeito in the election could strengthen opposition parties that have vowed to reduce or eliminate the sales tax. Japanese government bond yields surged to record highs in recent sessions as investors priced in the potential for increased fiscal spending following this weekend’s election. On the trade front, the outlook for the trade deal between the U.S. and Japan remains uncertain even as the August 1st deadline draws near. Local media reported that Prime Minister Shigeru Ishiba is planning to meet with U.S. Treasury Secretary Scott Bessent in Tokyo on Friday. In corporate news, Toho surged over +10% after the creator of the “Godzilla” movie franchise boosted its full-year net profit guidance. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +3.06% to 24.27.
Pre-Market U.S. Stock Movers
ASML Holding N.V. (ASML) slumped over -8% in pre-market trading after the Dutch supplier of chip-making equipment said it could no longer guarantee growth in 2026 due to rising uncertainty stemming from President Trump’s tariffs. The warning weighed on U.S. semiconductor equipment makers, with Applied Materials (AMAT) and Lam Research (LRCX) falling over -3% in pre-market trading.
Johnson & Johnson (JNJ) rose more than +2% in pre-market trading after the drug and medical device maker posted better-than-expected Q2 results and raised its full-year guidance.
Brighthouse Financial (BHF) surged over +9% in pre-market trading after the Wall Street Journal reported that investment firm Aquarian Holdings was in exclusive talks to acquire the company.
Global Payments (GPN) climbed more than +6% in pre-market trading after the Financial Times reported that activist hedge fund Elliott Management had built a “sizeable” stake in the payments processing company.
Palantir Technologies (PLTR) gained about +0.6% in pre-market trading after Mizuho upgraded the stock to Neutral from Underperform.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Wednesday - July 16th
Johnson & Johnson (JNJ), Bank of America (BAC), Morgan Stanley (MS), Goldman Sachs (GS), Progressive (PGR), Prologis (PLD), PNC Financial (PNC), Kinder Morgan (KMI), M&T Bank (MTB), United Airlines Holdings (UAL), First Horizon National (FHN), Rexford Inl Rty (REXR), Commerce Bancshares (CBSH), Synovus (SNV), Alcoa (AA), First Industrial RT (FR), Home BancShares (HOMB), SL Green (SLG), AAR (AIR), Banner (BANR), Monarch (MCRI), Triumph Bancorp (TFIN), Great Southern Bancorp (GSBC), South Plains Financial (SPFI), Martin Midstream (MMLP).
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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