U.S. equity futures edged higher in early Thursday trading , while the dollar slumped against a basket of its global peers and Treasury yields eased, as global markets reacted to the potential for tri-lateral talks that could end Russia’s three-year war on Ukraine.
President Donald Trump held phone calls with Russia President Vladimir Putin and Ukraine’s President Volodymyr Zelenskiy yesterday, telling reporters that both leaders are willing to begin discussions to end the conflict that has cost more than a million lives.
“We expect that he’ll come here, and I’ll go there and we’re going to meet also probably in Saudi Arabia the first time,” Trump told reporters in Washington of an as-yet confirmed meeting with Putin. “We’ll meet in Saudi Arabia, see if we can get something done.”
The prospect of talks, while vague, triggered a rally in risk assets overnight, pushing the U.S. dollar index 0.33% lower to 107.587 and sparking solid rallies in Japan, Asia and European markets.
Stocks in the U.S., however, are set for a more muted open following yesterday’s hotter-than-expected January CPI data, which has all but erased bets on a 2025 Federal Reserve rate cut.
WASHINGTON, DC – FEBRUARY 03: U.S. President Donald Trump speaks to reporters in the Oval Office of the White House on February 03, 2025 in Washington, DC. After signing a series of executive orders and proclamations, Trump spoke to reporters about a range of topics including recent negotiations with Mexico on tarriffs. (Photo by Anna Moneymaker/Getty Images)
Anna Moneymaker/Getty Images
Heading inflation rose to the highest monthly level since August of 2023, with core reading also rising amid soaring shelter, insurance and used car prices.
The Commerce Department will publish its January estimate of producer price inflation at 8:30 am Eastern time, with economists focused on components of the reading that feed into the Fed’s preferred PCE inflation gauge, which will be released later this month.
Benchmark 2-year Treasury bond yields were last trading at 4.342%, down 2 basis points from last night’s close, ahead of today’s PPI reading and the Labor Department’s weekly jobless claims data.
Related: CPI inflation shock hammers Fed rate cut bets for 2025
A market inflation gauge, meanwhile, which tracks the difference between 2-year inflation-protected bonds and benchmark 2-year notes, rose to the highest levels since the summer of 2022 in overnight trading.
Investors are also focused on the potential for an announcement of new ‘reciprocal’ tariffs on goods from nations that charge duties on U.S. exports, which could come from the White House later today following a visit from India Prime Minister Narendra Modi.
“Key sectors to watch for potential exemptions include the automotive and pharmaceutical industries,” said ActivTrades Analyst Anderson Alves. “Any aggressive tariff announcement targeting key sectors could impact U.S. Treasury yields and the U.S. dollar, potentially dragging risk assets lower across global markets.”
On Wall Street, stocks are set for a modestly firmer open following on from last night’s selloff, with the S&P 500 called 1 point higher and the Dow Jones Industrial Average priced for a 10 point advance.
The tech-focused Nasdaq, meanwhile, is indicated 35 points higher with Nvidia (NVDA) , Super Micro Computer (SMCI) , Tesla (TSLA) and Intel (INTC) the most active stocks in premarket trading.
Related: Analyst revisits Intel stock forecast amid surprise plans for a key spinoff
In overseas markets, the prospect of an end to the war in Ukraine, as well as the potential for a massive U.S. aid plan to rebuild the nation, helped lift Europe’s Stoxx 600 to a fresh all-time high in early Frankfurt trading, with the regional benchmark last seen 0.5% higher and just a point off its earlier peak.
More Wall Street Analysis:
Goldman Sachs analysts warn on Trump tariff impact for stocksAnalyst predicts stocks likely to join the S&P 500 in 2025Every major Wall Street analyst’s S&P 500 forecast for 2025
In Britain, the FTSE 100 fell 0.74% in London as global oil prices eased in the wake of the Russia-Ukraine talks reports and the pound rose to 1.2502 against the dollar following a better-than-expected reading for fourth quarter GDP from the Office for National Statistics.
Overnight in Asia, Japan’s Nikkei 225 rose 1.78% in Tokyo as a weaker yen supported export stocks, while the regional MSCI ex-Japan benchmark rose 0.15% into the close of trading.
Related: Veteran fund manager issues dire S&P 500 warning for 2025
