Pre-market futures are climbing from early-morning negative levels to relatively healthy gains an hour before the opening bell. We’ve begun to flatten out off July 3rd highs, and without something of a major catalyst to push market indexes to new levels higher, we might expect this sideways chop to continue.
The Dow is up +133 points at this hour, +0.30%, while the S&P 500 is +14, +0.23%. The Nasdaq is even more muted currently: +43 points, +0.19%, while the small-cap Russell 2000 — after a nice surge yesterday — is down -1 point at present. Bond yields are creeping up slightly on the 10-year, to +4.42%, while the 2-year remains at +3.90%.
We’re also quiet on the economic report front this week, and Q2 earnings season doesn’t really get rolling until the biggest Wall Street banks begin reporting on Tuesday of next week (although we’ll hear from Delta Air Lines DAL and Conagra CAG tomorrow). Therefore, we’re relatively beholden to news reports, social media posts and other remarks related to potential trade deals, as today marks the “official” trade deadline from the 90-day pause on reciprocal tariffs from April 9th of this year.
What to Expect from Today’s Stock Market
At 2pm ET today, the official minutes from the latest Federal Open Market Committee (FOMC) meeting are expected. Last month’s Fed meeting was fairly uneventful, so we’re not expecting many fireworks from the minutes, but analysts will be paying attention to relatively subtle shifts beneath the headline.
All 12 voting members chose to keep the 4.25-4.50% Fed funds rate intact for the fourth straight meeting. Thinking back to the start of the year, June was the “for sure” time when Fed rates would be forthcoming. Then again, some analysts thought we were going to get as many as 6 or 7 rate cuts in 2025. The Fed still thinks there may be room for 2, but much of the decision-making process would haver to be cleared up first.
In a word, this means “tariffs.” Fed Chair Jerome Powell said he sees a +0.6% inflation risk from current levels due to tariffs. Clearing the murky outlook, in any case, should go a long way toward prodding the Fed to action; even if, say +30% tariffs are locked in for all U.S. trading partners, at least that would give the Fed — not to mention businesses — parameters from which to operate within.
Wholesale Inventories for the month of June will also be released today, at 10am ET. The previous month, these dipped to negative levels — largely due to pull-forwards ahead of tariff realities in February and March. We expect these numbers to even out over time, but — just like with Powell’s Fed — it will be a lot easier to project with actual trade policy in a firm place.
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Delta Air Lines, Inc. (DAL): Free Stock Analysis Report Conagra Brands (CAG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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