Futures for the main US stock market indexes rebounded on Wednesday, recovering from recent losses on speculation about a possible compromise on the trade tariffs imposed by President Donald Trump on neighboring countries.
At 05:20 ET (10:20 GMT), Dow Jones futures were up 255 points (+0.6%), S&P 500 futures were up 40 points (+0.7%), and Nasdaq 100 futures were up 160 points (+0.8%).
Hope for Trade Talks on Tariffs
The stock markets had just come out of two sessions in the red, with the Nasdaq approaching correction territory after Trump announced tariffs of 25% on imports from Mexico and Canada and 20% on Chinese products, provoking immediate retaliation.
However, sentiment improved following statements by Secretary of Commerce Howard Lutnick, who said in an interview with Fox Business that Trump is willing to “negotiate a middle ground” with Canada and Mexico.
Although these tariffs have raised concerns about economic growth and inflation in the US, the president defended their implementation in a speech to Congress on Tuesday, arguing that he is seeking to correct unfair trade practices.
“They have been exploiting us for decades, and that will not happen again. The tariffs will make the US great and prosperous again,” Trump said.
Services PMI Data in Focus
Investors will also be paying attention to new information on the US services sector, which is very important. The Institute for Supply Management’s non-manufacturing PMI is expected to indicate a moderate dip in February.
Earlier in the week, the manufacturing PMI reflected activity still expanding, but with a drop in new orders and an increase in factory prices to their highest level in three years, generating concern in the market.
Corporate Results
Companies reporting results on Wednesday include Abercrombie & Fitch (ANF), Campbell Soup (CPB), and Brown-Forman (BFb).
Despite an overall positive earnings season, Capital Economics warned of increased risks for US financial markets, noting that the euphoria of the “Trump trade” has quickly faded.
“Weak economic data, political uncertainty, and lower confidence among businesses, consumers, and investors are creating headwinds for the markets,” the firm said.
Oil Retreats
Crude oil prices fell on Wednesday, reaching five-month lows on expectations of an increase in production from major producers starting in April and uncertainty over a possible global trade war.
At 05:20 ET, WTI crude was down 1.5% at $67.25 a barrel, while Brent was down 1% at $70.35 a barrel, close to its lowest levels in five months.
The energy market remains under pressure following confirmation that OPEC+ will maintain its plan to increase production in April, adding to the impact of the new US tariffs on Canada, Mexico, and China.
