Dow futures fall 130 pts as US, China agree on trade framework; CPI data up next

Dow futures fall 130 pts as US, China agree on trade framework; CPI data up next

US stock futures slipped early Wednesday as investors digested a new trade policy framework between the US and China and braced for the release of May’s consumer inflation data — a key input for the Federal Reserve’s policy stance.

Futures linked to the Dow Jones Industrial Average fell 138 points, or 0.3%. S&P 500 futures were down 0.2%, while Nasdaq 100 futures slipped 0.3%, suggesting a mildly negative open on Wall Street.

The move came after officials from the US and China concluded two days of discussions in London with a broad agreement to move forward on trade cooperation. As part of the tentative framework, China is expected to approve exports of rare earth minerals, while the US plans to roll back restrictions on certain advanced tech goods. The deal, however, remains subject to President Trump’s sign-off, said Commerce Secretary Howard Lutnick.

President Donald Trump declared that a new US-China trade framework was “done,” pending final approval from both him and Chinese President Xi Jinping. As part of the agreement, China will supply rare-earth minerals and fully assembled magnets “up front,” while the US plans to maintain a 55% tariff on Chinese goods but will allow Chinese students to study at American universities.

Markets had rallied on Tuesday amid optimism that a deal was close, but investor mood turned more cautious after Deutsche Bank’s chief economist David Folkerts-Landau warned that Washington’s improving market confidence could pave the way for renewed tariff rhetoric — potentially reigniting trade tensions with both China and Europe. He also flagged growing concerns over long-end US bond yields, which are amplifying fiscal worries globally.

Attention now turns to macro data, with the US Bureau of Labor Statistics set to release the consumer price index (CPI) reading for May. Economists polled by Dow Jones expect a 0.2% rise on a monthly basis, while the annual rate is seen easing to 2.4%. The data is expected to reinforce the Fed’s cautious stance on interest rates, though any upside surprise could reignite fears of sticky inflation.

In single-stock action, shares of Datadog may be in focus after Goldman Sachs raised its target price on the cloud computing firm to $138 from $127 while maintaining a ‘buy’ rating. The stock has declined 16% year-to-date, but Goldman’s new forecast implies a potential 15% upside from current levels.