Dow futures climbed over 200 points Tuesday morning, clawing back some ground after Monday’s slump. Traders seem a bit more upbeat with talk of potential Fed rate cuts and some decent earnings helping the mood.
The market is still keeping a close eye on trade tensions, especially after President Trump’s fresh tariff comments.
But for now, the focus is on earnings, with McDonald’s and Disney in the spotlight and whether the Fed will step in to support the economy, especially amid signs of slowing global growth and mixed consumer spending data.
5 things to know before Wall Street opens today
1. Worries about the global economy are still hanging over the market, with China’s shaky growth and Europe’s energy issues keeping investors on edge.
Sluggish manufacturing and trade hiccups could start hitting US exports and earnings if things don’t pick up. For now, traders are trying to balance solid US service sector numbers with the not-so-great headlines overseas.
2. Traders are increasingly eyeing a Fed rate cut in September, especially after weaker jobs numbers and signs the economy’s losing steam. That’s given stocks a boost, with hopes rising for looser monetary policy.
But not everyone’s buying it as some on Wall Street think inflation could still throw a wrench in the Fed’s plans.
3. Inflation’s still running a bit hot as consumer prices rose 2.7% in June, or 2.9% if you strip out food and energy. Tariffs have played a role, though the Fed sees that impact as temporary.
But with inflation sticking above the Fed’s 2% target, it’s a tricky balancing act: ease up too much and risk overheating, tighten too much and risk stalling the recovery.
4. The job market’s showing some signs of cooling as hiring has slowed a bit and growth seems to be easing through the first half of 2025, even as unemployment stays low.
Wages aren’t rising as fast either, which could help take some pressure off inflation, but might also weigh on consumer spending. All eyes are now on next month’s jobs data for a better read on where the labor market’s really headed.
5. Wall Street has a full slate of economic updates to digest this week, from inflation prints to jobs numbers to comments from Fed officials as traders pay close attention.
With the timing of a potential rate cut still up in the air, markets are looking for any signal that might tip the scales. Softer labor data has raised hopes for a policy shift, but with inflation still above target, the Fed isn’t likely to move without more convincing evidence.
This week’s releases could offer just that or reinforce the case for patience.
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