Stocks ended Tuesday mostly lower as chip stocks pulled back from their recent rally.
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Stock futures are mixed Wednesday as investors await another report on inflation, while oil prices are sticking above $100 a barrel amid uncertainty about Iran peace talks; a report on wholesale prices is due this morning after consumer price data yesterday showed that inflation hit a three-year high in April; President Trump is in China along with a large group of CEOs to meet with Chinese President Xi Jinping; the Senate is expected to confirm Kevin Warsh as the new Federal Reserve chair as soon as today; and Cisco is scheduled to report earnings after the closing bell. Here’s what you need to know today.
Stocks Mixed Ahead of Inflation Report, Oil Stays Above $100
Futures are pointing to a mixed open this morning for major stock indexes as investors await this week’s second report on inflation and monitor developments in the Iran war. Futures tied to the S&P 500 and the Nasdaq were recently up 0.2% and 0.7%, respectively, while Dow Jones Industrial Average futures slipped 0.3%. On Tuesday, the Dow closed slightly higher, while the S&P 500 and Nasdaq each pulled back from their record closing highs set on Monday. WTI futures, the U.S. crude oil benchmark, were holding steady at around $102 per barrel amid an ongoing lack of progress in peace talks with Iran. Gold futures were up 0.5% at just above $4,700 an ounce while bitcoin, which has traded in a narrow range over the past week, was little changed at $80,500. The 10-year Treasury yield, which affects rates on a variety of consumer loans, ticked lower to 4.46%, after closing Tuesday at its highest level since last July.
Second Inflation Report of the Week Due With April PPI
Producer Price Index data for April, set for release at 8:30 a.m. ET, will show how much prices are rising at the wholesale level. Economists estimate that the index rose 0.5% in April from the previous month, unchanged from the increase in March, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. Consumer price data released Tuesday showed that inflation hit its highest level in three years last month, as soaring gas prices caused by the Iran war have started to lift prices across the economy. Federal Reserve officials are closely monitoring the impact of the war on the economy as they consider their next move on interest rates.
Trump in China With Group of CEOs in Tow
President Donald Trump is in China for a two-day meeting with Chinese President Xi Jinping. The leaders of the world’s two largest economies are likely to discuss a variety of topics including trade, Taiwan, the Iran war and AI technology, per The Associated Press. A large group of some of the biggest CEOs in American business have joined Trump, including Tesla (TSLA) CEO Elon Musk, who had a dramatic split with the Trump administration last year, outgoing Apple CEO (AAPL) Tim Cook, Boeing’s (BA) Kelly Ortberg, Jensen Huang of Nvidia (NVDA), and Goldman Sachs (GS) chief David Solomon.
Senate Poised to Confirm Warsh as Fed Chair
Kevin Warsh, Trump’s pick to succeed Jerome Powell as Federal Reserve chair, could be confirmed for that role as soon as today, after he was confirmed by the Senate yesterday to join the Fed’s board of governors. The vote for chairman is the next step to securing Powell’s replacement ahead of his term expiring on Friday, though Powell has said he plans to stay on as a Fed governor until that term ends in 2028. Warsh is set to join the Fed as inflation is surging because of the Iran war, complicating the central bank’s previously expected path to interest rate cuts later this year. The next Fed meeting is scheduled to come in mid-June.
Cisco Set to Report Earnings After the Closing Bell
Cisco (CSCO) is scheduled to post quarterly results after markets close today. The networking hardware provider is expected to report $15.55 billion in revenue and adjusted earnings of $1.03 per share, each rising year-over-year as the former dot-com era favorite has now become a major beneficiary of the AI boom. A key question for Cisco is how it will maintain sales growth while raising prices to offset higher memory chip costs. Investors will also be looking for the company to lift its full-year outlook, amid high expectations for continued growth. Cisco shares were little changed premarket, after closing at a fresh record of $99.29 on Tuesday.
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