Tame Inflation Data May Lead To Initial Strength On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a higher open on Wednesday, with stocks likely to move to the upside following the mixed performance seen in the previous session.

The futures moved to the upside following the release of a Labor Department report showing producer prices in the U.S. unexpectedly came in flat in the month of June.

The Labor Department said its producer price index for final demand was unchanged in June after rising by an upwardly revised 0.3 percent in May.

Economists had expected producer prices to increase by 0.2 percent compared to the 0.1 percent uptick originally reported for the previous month.

The report also said the annual rate of producer price growth slowed to 2.3 percent in June from an upwardly revised 2.7 percent in May.

The annual rate of producer price growth was expected to edge down to 2.5 percent from the 2.6 percent originally reported for the previous month.

Early buying interest may also be generated in reaction to some upbeat earnings news, with shares of Johnson & Johnson (JNJ) jumping by 2.1 percent in pre-market trading after the healthcare giant reported better than expected second quarter results and raised its full-year guidance.

Bank of America (BAC) is also seeing notable pre-market strength after the company reported second quarter earnings that exceeded expectations.

Fellow financial giants Goldman Sachs (GS) and Morgan Stanley (MS) also reported better than expected second quarter earnings.

Stocks moved mostly higher early in the session on Tuesday but gave back ground over the course of the trading day. The major averages pulled back well off their highs of the session before eventually closing mixed.

While the tech-heavy Nasdaq rose 37.47 points or 0.2 percent to a new record closing high of 20,677.80, the S&P 500 fell 24.80 points or 0.4 percent to 6,243.76 and the Dow slumped 436.36 points or 1.0 percent to 44,023.29.

The uptick by the Nasdaq came amid strength in the semiconductor stocks, as reflected by the 1.3 percent gain posted by the Philadelphia Semiconductor Index. The index ended the session at its best closing level in a year.

Nvidia (NVDA) helped lead the sector higher, with the AI darling surging by 4.0 percent to a record closing high after indicating it will "soon" resume H20 AI chip sales to China.

"The U.S. government has assured NVIDIA that licenses will be granted, and NVIDIA hopes to start deliveries soon," the company said in a statement.

On the other hand, housing stocks moved sharply lower over the course of the session, resulting in a 3.3 percent plunge by the Philadelphia Housing Sector Index.

Oil service stocks also slumped amid a decrease by the price of crude oil, dragging the Philadelphia Oil Service Index down by 3.1 percent.

Banking, pharmaceutical and biotechnology stocks also saw considerable weakness, contributing to the pullback by the broader markets.

Earlier in the day, stocks responded positively to a Labor Department report showing consumer prices in the U.S. increased in line with economist estimates in the month of June.

The Labor Department said its consumer price index rose by 0.3 percent in June after inching up by 0.1 percent in May.

The annual rate of consumer price growth accelerated to 2.7 percent in June from 2.4 percent in July. Economists had expected the price of growth to rise to 2.6 percent.

The Labor Department also said the core consumer price index, which excludes food and energy prices, edged up by 0.2 percent in June after creeping up by 0.1 percent in May. Core prices were expected to increase by 0.3 percent.

Buying interest waned over the course of the session, however, with concerns about President Donald Trump's trade wars still hanging over the markets.

Commodity, Currency Markets

Crude oil futures are declining $0.67 to $65.85 a barrel after falling $0.46 to $66.52 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $3,341.20, up $4.50 compared to the previous session's close of $3,336.70. On Tuesday, gold slid $22.40.

On the currency front, the U.S. dollar is trading at 148.54 yen compared to the 148.88 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1609 compared to yesterday's $1.1601.

Asia

Asian stocks ended mostly lower on Wednesday as U.S. President Donald Trump announced a 19 percent tariff on Indonesian exports under a new bilateral pact.

Indonesia has scrapped tariffs on U.S. goods and pledged billions in purchases to maintain access to its second-largest export market, it was said. Analysts said the deal is heavily skewed in favor of the U.S., requiring significant trade-offs.

The 19 percent tariff is just below Vietnam's 20 percent and Bangladesh's 35 percent, two key rivals in major export sectors such as textiles, footwear and apparel.

The dollar pulled back slightly, and U.S. Treasury yields retreated after rising in the previous session as June U.S. CPI data showed early signs of tariff-linked inflation.

Gold inched higher on concerns surrounding Trump's tariff policy. Oil prices were steady as OPEC maintained its oil-demand forecast for 2025 and 2026.

China's Shanghai Composite Index finished marginally lower at 3,503.78. Hong Kong's Hang Seng Index gave up early gains to end 0.3 percent lower at 24,517.76.

Japanese stocks fluctuated before ending on a flat note due to U.S. tariff worries and uncertainty surrounding the elections to the upper house.

The Nikkei 225 Index finished marginally lower at 39,663.40, while the broader Topix Index slipped 0.2 percent to 2,819.40.

Chip-related heavyweights continued to climb after the U.S. lifted export curbs to China. Advantest rose 0.6 percent and Tokyo Electron rallied 1.8 percent.

Toho soared nearly 11 percent after the creator of the "Godzilla" movie franchise raised its annual net profit forecast.

Seoul stocks fell notably amid diminished hopes for Federal Reserve interest-rate cuts. The Kospi slid 0.9 percent to 3,186.38, with automaker Hyundai Motor and battery maker LG Energy Solution both falling around 1.7 percent.

Australian markets ended lower, dragged down by healthcare stocks after Trump indicated that pharma tariffs were likely by the end of July. The benchmark S&P/ASX 200 Index dropped 0.8 percent to 8,561.80, while the broader All Ordinaries Index settled 0.7 percent lower at 8,816.40.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index rose 0.5 percent to 12,754.59, marking its second straight session of gains.

Europe

European stocks have struggled for direction on Wednesday following three days of losses. A cautious undertone prevailed due to lingering tariff worries and disappointing earnings updates from the likes of ASML Holding NV and Renault SA.

Investors were also reacting to data that showed British inflation increased unexpectedly in June to reach an 18-month high due to higher transport and food costs.

The consumer price index advanced 3.6 percent year-on-year in June, faster than the 3.4 percent rise in May. This marked the highest inflation since January 2024.

The German DAX Index is up by 0.5 percent and the U.K.'s FTSE 100 Index is up by 0.3 percent, although the French CAC 40 Index is nearly flat.

In corporate news, shares of Kenmare Resources have slumped. The titanium and zircon miner announced that it is on track to achieve 2025 production and cost guidance.

Stellantis has also tumbled. The carmaker scrapped its hydrogen fuel cell technology program and said it would no longer launch a range of hydrogen-powered vehicles this year due to factors such as limited availability of hydrogen-refueling infrastructure.

Chipmaking supplier ASML Holding has also plummeted after saying it could no longer guarantee growth in 2026 due to uncertainty from U.S. tariffs.

AstraZeneca has also fallen after its experimental drug for a rare plasma cell disorder failed in an advanced study.

Renault shares have also plunged. The automaker lowered its 2025 guidance and announced the appointment of a new interim chief executive officer.

On the other hand, luxury group Richemont has moved to the upside after its first quarter revenue topped estimates.

Chilean miner Antofagasta has also jumped after copper output rose 11 percent in the first half of 2025.

U.S. Economic News

A report released by the Labor Department on Wednesday showed producer prices in the U.S. unexpectedly came in flat in the month of June.

The Labor Department said its producer price index for final demand was unchanged in June after rising by an upwardly revised 0.3 percent in May.

Economists had expected producer prices to increase by 0.2 percent compared to the 0.1 percent uptick originally reported for the previous month.

The report also said the annual rate of producer price growth slowed to 2.3 percent in June from an upwardly revised 2.7 percent in May.

The annual rate of producer price growth was expected to edge down to 2.5 percent from the 2.6 percent originally reported for the previous month.

At 9:15 am ET, the Federal Reserve is scheduled to release its report on industrial production in the month of June. Industrial production is expected to inch up by 0.1 percent in June after slipping by 0.2 percent in May.

The Energy Information Administration is due to release its report on crude oil inventories in the week ended July 11th at 10:30. Crude oil inventories are expected to decrease by 1.8 million barrels after jumping by 7.1 million barrels in the previous week.

At 2 pm ET, the Federal Reserve is scheduled to release its Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts.