News Digest / Latest Stock Market News / Wednesday Markets: U.S. Stock Futures Rise Ahead of Fed Meeting and Inflation Data

Wednesday Markets: U.S. Stock Futures Rise Ahead of Fed Meeting and Inflation Data

Alex Vellor
08:38am, Wednesday, Jun 12, 2024
Photo by Michael Marais on Unsplash.com

U.S. stock futures ticked higher on Wednesday morning. Investors remained positive as they awaited the conclusion of the Federal Reserve's latest meeting and the release of important inflation data.

New Highs for S&P 500 and Nasdaq

The S&P 500 and the Nasdaq Composite reached new closing highs on Tuesday.

The S&P 500 finished at 5,375.32, up 0.27%, while the Nasdaq Composite closed at 17,343.55, gaining 0.88%. Both indexes hit fresh all-time highs during the trading session. Apple's surge to a record high after unveiling new AI features at its developers' conference boosted the Nasdaq. However, the Dow Jones Industrial Average dipped 0.31%, ending at 38,747.42.

Premarket Movers:

Company Stock Symbol Stock Movement Details
Oracle NYSE:ORCL +8.2% Announced partnerships with OpenAI and Google Cloud, forecasted revenue growth for the 2025 fiscal year.
GameStop NYSE:GME -1.3% Stock fell after completing an equity offering to raise $2.14 billion.
Birkenstock NYSE:BIRK -2.7% Downgraded by Goldman Sachs from buy to neutral, despite a strong year-to-date performance.
Rubrik NYSE:RBRK +2.4% Stock rose after beating first-quarter revenue expectations.
Paramount Global NASDAQ:PARA -1.7% Stock fell after ending talks for a potential sale of a controlling stake to Skydance Media.
Tesla NASDAQ:TSLA -0.2% Barclays analysts noted potential risks related to Elon Musk's compensation plan.
Caseys General Stores NASDAQ:CASY +5% Shares gained following earnings and revenue beat.

Inflation Data and Fed in Focus

On Wednesday, the Bureau of Labor Statistics will release the consumer price index (CPI) for May. Economists expect the data to show a 0.1% monthly increase in overall CPI, resulting in a 3.4% annual rise. The core CPI, excluding food and energy prices, is projected to increase by 0.3% month-over-month and 3.5% annually.

Later in the day, the Federal Reserve will conclude its two-day policy meeting. The central bank is expected to keep interest rates unchanged in the range of 5.25%-5.50%. However, investors will closely watch for any adjustments to the Fed's "dot plot," which could signal fewer than the previously indicated three rate cuts for 2024.

Most economists anticipate the dot plot to show two rate cuts, but some fear it could indicate only one, meaning the Fed might not make any moves until the end of the year.

EU Tariffs on Chinese EVs

The European Union announced it will impose higher tariffs on Chinese electric vehicle (EV) imports, claiming these imports benefit from "unfair subsidies" and pose a threat to European EV manufacturers. The EU Commission determined that China's battery electric vehicle (BEV) sector gains significantly from these subsidies and decided to implement provisional countervailing duties on BEV imports from China starting July 4, if negotiations with China do not yield a resolution. Definitive measures will be put in place within four months of the provisional duties.

The tariff breakdown includes a 38.1% tariff on BEV producers that did not cooperate with the EU's investigation and a 21% duty on compliant but unsampled carmakers. Tesla, which has a factory in Shanghai, might receive an adjusted duty rate upon further review by the Commission.

China's Ministry of Commerce criticized the EU's decision as lacking factual and legal basis, calling it a protectionist move.

The U.S. and the EU align on this issue, both aiming to safeguard their domestic EV industries against China's competitive pricing and expansion in the global market.

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