U.S. stocks point slightly lower ahead of a raft of mega-cap tech earnings and crucial U.S. economic data this week. Investors will be keeping tabs on numbers from Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:META), along with indicators of U.S. growth and inflation. Elsewhere, U.S. President Donald Trump signs orders easing the blow of his steep auto tariffs, while a top White House official says a trade deal has been reached with an unnamed foreign country.
1. Futures lower
U.S. stock futures edged broadly lower on Wednesday, as investors eyed a busy week of corporate earnings and U.S. data as well as fresh developments around Trump administration trade policies.
By 03:48 ET (07:48 GMT), the Dow futures contract was mostly unchanged, while S&P 500 futures had dipped by 12 points, or 0.2%, and Nasdaq 100 futures had fallen by 65 points, or 0.3%.
The main averages on Wall Street were higher at the end of trading on Tuesday following indications of progress in White House tariff negotiations. Still, fears remain that the levies could eventually weigh on U.S. growth and spark a recession in the global economy.
Against this backdrop, several high-profile companies are due to report in the coming days, including a collection of mega-cap technology names (more below).
Figures on the U.S. economy are also set to be released in the coming days that could provide insight into overall activity and the health of labor market. On Tuesday, surveys showed that job openings edged lower in March, although consumer confidence slumped in April.
2. Trump eases auto tariffs
Trump signed orders on Tuesday that aimed to help soften the impact of his auto tariffs through credits and relief from duties on certain materials.
The moves came as Trump traveled to Michigan, the traditional focal point of the American car industry, with a new set of steep 25% tariffs due to take effect soon.
As part of the changes, the president agreed to grant carmakers two years to push to reshore a larger percentage of their manufacturing operations in the U.S. -- a previously stated target of his aggressive tariff policies. Auto companies, many of which rely on supply chains that frequently cross foreign borders, have been heavily lobbying the White House to make alterations to its trade agenda.
Trump said that his administration "wanted to help them," adding he does not want to penalize these firms if "they can’t get parts." A group representing several foreign carmakers said the order provided some relief but said more must be done to support the industry.
Separately, U.S. Commerce Secretary Howard Lutnick told CNBC that a trade deal had been reached with one foreign country, although he did not reveal the name of the nation. Trump previously paused sweeping tariffs on a host of countries for 90 days, noting that the White House is planning to secure dozens of individualized trade agreements.
3. Earnings ahead
Highlighting the earnings calendar will be results after markets close from software giant Microsoft and Facebook-owner Meta Platforms.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. The companies are part of a slew of "Magnificent Seven" mega-cap tech players set to report this week, with iPhone-maker Apple (NASDAQ:AAPL) and e-commerce titan Amazon (NASDAQ:AMZN) scheduled to unveil earnings after the bell on Thursday. These groups have led markets higher in recent years, but have largely underperformed so far this year.
Executives will likely be pressed to discuss their heavy artificial intelligence investments, which have come under scrutiny since the emergence of a low-cost AI model from Chinese start-up DeepSeek earlier this year. The effect of Trump’s tariffs may also be in focus, especially after many other businesses flagged that the erratic policy moves have made it more difficult to map out spending plans.
Elsewhere on Wednesday, chipmaker Qualcomm (NASDAQ:QCOM) and construction equipment group Caterpillar (NYSE:CAT) will also report.
4. U.S. data in focus
Investors will also be keeping tabs on a slew of major economic data releases on Wednesday.
An initial reading of first-quarter U.S. gross domestic product, a measure of growth in the world’s largest economy, is tipped to have slowed to 0.2% from 2.4% in the final three months of 2024.
"Details of the report, especially on consumer spending, will be crucial for the market reaction," analysts at ING said in a note to clients.
Meanwhile, the personal consumption expenditures price index is also due out. The inflation metric is closely monitored by the Federal Reserve, which has indicated that it will take a wait-and-see attitude to future policy decisions as it assess the fallout from Trump’s tariffs.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. A separate reading of private payrolls is on the calendar as well. Payrolls processor ADP’s report is due to show that private employers added 114,000 roles in April, down from 155,000 in the prior month.
All of the data points could offer an early indicators of whether Trump’s tariffs are denting the wider economy -- an outcome that has been predicted by many economists.
5. Oil slips
Oil prices fell Wednesday, on course for their largest monthly drop in more than three years as the global trade war hit demand growth forecasts.
At 03:44 ET, Brent futures dropped 1.5% to $62.33 a barrel, and U.S. West Texas Intermediate crude futures fell 1.7% to $59.41 a barrel.
Both contracts have lost over 15% so far this month, the biggest percentage drop since November 2021.
Worries about demand amid the trade war have weighed on investor sentiment, while weak Chinese manufacturing activity data, released earlier Wednesday, has also played into this narrative.
