US futures slip ahead of key inflation print after Wall Street's blockbuster rally

Tuesday’s potential pullback follows a euphoric Monday on Wall Street, where all three major indices clocked their best performance since early April.

U.S. stock futures edged lower on Tuesday, as investors turned cautious ahead of a crucial inflation report, following a massive rally in the previous session.

Dow Jones Industrial Average futures slipped by 29 points, or 0.1 percent, while futures linked to the S&P 500 and Nasdaq 100 were down 0.2 percent and 0.3 percent, respectively.

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The dip comes as markets await fresh consumer price index (CPI) data, which could influence the Federal Reserve’s rate trajectory. Economists polled by Dow Jones expect headline inflation to hold steady at 2.4 percent year-on-year in April. Core inflation, which strips out volatile food and energy prices, is also projected to remain unchanged at 2.8 percent.

Tuesday’s potential pullback follows a euphoric Monday on Wall Street, where all three major indices clocked their best performance since early April. The Dow Jones jumped over 1,100 points, while the S&P 500 climbed more than 3 percent, trimming its year-to-date losses to just 0.6 percent. The tech-heavy Nasdaq surged 4.4 percent.

The rally was powered by a breakthrough in U.S.-China trade relations. After weekend talks in Switzerland, the two nations agreed to roll back some tariffs for 90 days, a move that eased investor fears of a prolonged trade war dragging down the global economy.

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As part of the agreement, both countries will reduce reciprocal tariffs to 10 percent, down from previous highs. However, U.S. duties on Chinese imports linked to fentanyl will remain in place, leaving China’s total tariff exposure at 30 percent. Treasury Secretary Scott Bessent told CNBC on Monday that another round of talks with Chinese officials is expected in the coming weeks to work toward a broader deal.

Meanwhile, Asia-Pacific markets traded on a mixed note Tuesday, as the euphoria from Wall Street’s rally faded despite a temporary truce in U.S.-China trade tensions.

Hong Kong led losses in the region, with the Hang Seng Index tumbling 1.87 percent to 23,108.27 — its steepest fall in nearly a month. The Hang Seng Tech Index dropped even further, losing 3.26 percent to end at 5,269.66. The sell-off marked a sharp reversal from Monday’s strong gains, which were fueled by optimism over the 90-day tariff pause and a 115 percentage point cut in reciprocal levies between Washington and Beijing.

Mainland Chinese markets fared better, with the CSI 300 index inching up 0.15 percent to close at 3,896.26.

At close, the Sensex was down 1,281.68 points or 1.55 percent at 81,148.22, and the Nifty was down 346.35 points or 1.39 percent at 24,578.35. About 2503 shares advanced, 1314 shares declined, and 132 shares unchanged.

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