AI stocks lifts Nasdaq but S&P Dow drops: US stock market futures today: Nasdaq hits record high as AI stocks rally, but Dow plunges 436 points and S&P dips on hot inflation, Trump tariffs, and bank stock slide

Why did US stock futures stall after Tuesday’s sharp drop?

After the Dow tumbled over 400 points in Tuesday’s session, futures were flat Wednesday morning. The S&P 500 (ES=F) and Dow Jones (YM=F) showed minimal movement, while Nasdaq 100 futures (NQ=F) fell 0.3%. That dip followed a warning from ASML (ASML), a key chip equipment maker, which cited tariff-related risks to global growth.

The broader pause came as traders digested Tuesday’s Consumer Price Index (CPI) report. Inflation for June jumped at its fastest pace since February, signaling that price pressures may be heating up again—largely due to early impacts from the Trump administration’s new trade tariffs.

Dow Jones Futures (E-mini)

• Current Value: 44,267.00
• Change: +20.00
• Change (%): +0.05%
• Open: 44,171.00
• Day’s Range: 44,092 – 44,284
• 52‑Week Range: 36,708 – 45,270
• Volume: ~11,908 contracts
• Previous Close: 44,247.00

What’s driving the fear of delayed Fed rate cuts?

Wall Street has started to rethink the timing of interest rate cuts, especially after the CPI data showed signs of accelerating inflation. The market had been hoping for rate relief as soon as September. However, traders are now leaning toward a more cautious stance, with odds of a September cut now near 50-50, according to the CME Group’s FedWatch Tool.

President Donald Trump, who has been vocally pushing for lower interest rates to support growth amid his tariff push, faces a less accommodative Fed. For now, the Federal Reserve is widely expected to hold rates steady not just in July but possibly into the fall.

Nasdaq 100 Futures (E-mini)

• Current Value: 23,020.00
• Change: –36.75
• Change (%): –0.16%
• Open: 23,014.25
• Day’s Range: 22,929.00 – 23,045.25
• 52‑Week Range: 16,460 – 23,222.75
• Volume: ~59,612 contracts
• Previous Close: 23,056.75

How are bond yields reacting to shifting Fed expectations?

With inflation fears on the rise, the Treasury market saw yields spike. The 10-year yield (^TNX) climbed close to 4.5%, while the 30-year yield (^TYX) surged past 5% for the first time since early June. These moves suggest investors are adjusting to a world with persistent inflation and fewer immediate rate cuts.

This tightening in yields often signals concern about future borrowing costs and economic cooling, especially as trade tensions escalate.

Bond yields climbed again:

• 10-Year Treasury: Rose to 4.49%
• 2-Year Treasury: Hit 3.95%, highest since early June

Commodities:

• WTI Crude Oil: $66.65/barrel
• Gold: $3,330/oz (slightly lower)
• Copper: Unchanged, but under spotlight due to 50% tariff

What’s next for inflation as PPI data gets released?

Investors are now looking to the Producer Price Index (PPI) report, scheduled for release Wednesday. Unlike the CPI, which tracks consumer prices, the PPI reflects wholesale price trends—a leading indicator for inflation down the road. Analysts expect a similar trend: a notable pickup in wholesale inflation, likely fueled by supply chain disruptions and tariff-driven costs.

These numbers are crucial in shaping how the Federal Reserve reacts in the months ahead, and they could further influence market volatility if they come in hotter than expected.

June CPI shows inflation ticking up

• Headline CPI: Rose to 2.7% YoY, up from 2.4% in May
• Core CPI: Climbed to 2.9% YoY

The hotter-than-expected inflation data triggered fears that the Federal Reserve might delay its anticipated rate cuts. Economists and analysts pointed to a clear link between rising prices and newly imposed tariffs on consumer goods.

How are Trump’s new tariffs impacting market confidence?

President Trump is moving forward with plans to increase tariffs on key trading partners, including the European Union, Canada, and Mexico, starting next month. The market is beginning to factor in higher import costs, which could seep into inflation data and weigh on consumer spending.

On Tuesday, Trump announced a new trade agreement with Indonesia, signaling continued activity on the international trade front. While the administration views tariffs as a tool to secure better trade terms, investors remain wary of their potential to stoke inflation and slow global growth.

E-mini Dow Jones Futures (Mini Contract, $5)

• Open Interest: ~83,013 contracts
• Open: 44,171.00
• Day’s Range: 44,092 – 44,275
• 52‑Week Range: 36,708 – 45,227

What are earnings reports saying about the current market outlook?

Earnings season kicked off Tuesday with mixed results from major financial firms. Goldman Sachs (GS) and Morgan Stanley (MS) are in focus today, alongside Johnson & Johnson (JNJ) and United Airlines (UAL). These reports could offer more clarity on how corporate America is weathering higher inflation and rising interest rates.

Investors are watching for forward guidance more than past results, as companies grapple with higher costs, consumer uncertainty, and global supply chain issues tied to new tariffs.

Key takeaways for investors

• Tariff inflation is real: June CPI data confirms that U.S. tariffs are now impacting consumer prices.
• Tech is still king: AI optimism helped keep the Nasdaq strong while other sectors stumbled.
• Financials are flashing red: Banks are struggling with higher yields, sluggish earnings, and margin compression.
• Fed rate cuts uncertain: With inflation back on the rise, expectations for near-term rate relief may need to be tempered.

What should investors watch now?

The US stock market today is caught in a delicate balancing act. On one hand, inflation is heating up, likely putting the brakes on any immediate rate cuts. On the other, President Trump’s tariff agenda and ongoing trade negotiations are stirring new economic risks. Meanwhile, rising bond yields and mixed corporate earnings are adding layers of uncertainty.

As more inflation data and earnings roll in this week, investors should keep an eye on rate cut expectations, bond yields, and tariff developments—all of which could drive the next big move in markets.

FAQs:

Q1: Why are Nasdaq futures down in the US stock market today?
Nasdaq futures fell due to inflation fears and weak chip sector outlook from ASML.

Q2: Will the Fed cut rates after the CPI and PPI reports?
Rate cut hopes are fading as June inflation data shows stronger price growth.