Nasdaq, S&P 500 Futures Slip Ahead Of Fed Minutes As Trump Ramps Up Tariff Threat: Strategists Flag Opportunity To Pick Stocks At ‘More Favorable’ Valuation

U.S. stock futures flatlined early Wednesday after tariff uncertainty kept sentiment muted for much of Tuesday’s session. President Donald Trump on Tuesday threatened to impose 50% levies on copper imports and 200% tariffs on pharmaceutical products. 

The president further clarified that no further tariff deadline extensions would be forthcoming. 

Confounding the outlook further is a warning from Trump late Tuesday that he would release letters to at least seven more countries Wednesday morning. He also said letters to an additional number of countries will be released in the afternoon.

As of 12:17 a.m. ET on Wednesday, the Dow, S&P 500, and Nasdaq 100 futures were all down about 0.10%, while the Russell 2000 futures fell over 0.30%.

Stocks went about in a lackluster manner before closing Tuesday’s session on a mixed note as traders mulled the incoming tariff headlines. Consumer, financial, and utility stocks served as drags, with a strong rally in energy stocks providing an offsetting impact.

The SPDR S&P 500 ETF (SPY), an exchange-traded fund (ETFs) that track the S&P 500 Index, edged down 0.05%, and SPDR Dow Jones Industrial Average ETF Trust (DIA) retreated 0.36%.

On the other hand, the Invesco QQQ Trust (QQQ) ETF and the iShares Russell 2000 ETF (IWM) moved up 0.06% and 0.66%, respectively.

Traders now shift their attention to the minutes of the June Federal Open Market Committee (FOMC) meeting in which the rate-setting committee, led by Jerome Powell, decided to keep the Fed funds rate unchanged at 4.25%-4.50% despite political pressure to lower rates. The minutes will be released at 2 p.m. ET.

Also on tap is the Commerce Department’s wholesale inventories report for May (10 a.m. ET).

Metal coating services company AZZ, Inc. (AZZ) is scheduled to announce its quarterly results after the market closes.

In its mid-year outlook, LPL Financial said it expects a slowdown in growth, softer labor demand, and slightly higher inflation as the delayed impact of President Donald Trump’s trade policy unfolds.  “This challenging backdrop will likely keep the Federal Reserve in a cautious holding pattern on monetary policy for an extended period,” the firm said.

According to LPL, the stock market outlook for the second half of the year will hinge on developments in trade talks, artificial intelligence (AI), interest rate fluctuations, and tax policy. It predicts modest gains, as valuations already account for much of the good news.

“While volatility is expected in a tough macro environment, market pullbacks could offer smart opportunities to selectively add to equity positions,” the firm said. “Staying alert during market volatility may present timely chances to add equity exposure at more favorable valuations.”

In the commodity market, crude oil prices edged lower after Tuesday’s 3% rally, and gold futures traded down about 0.4%, although they remained above the $3,300 psychological mark. Trump’s proposal to impose tariffs on copper weighed down on the metal, with prices sliding on the London Metal Exchange.

The 10-year U.S. Treasury note yield was little changed after breaching the 4.4% level on Tuesday. The U.S. dollar firmed up against major currencies.

Sentiment in the Asian markets remained mixed. 

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