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Stock market today: Dow, S&P 500, Nasdaq futures slip despite Wall Street cheering for US-China trade truce

Mon May 12, 2025
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Updated 1 min read

In This Article:

US stock futures backed off on Tuesday as economic worries replaced US-China trade truce euphoria in the wait for the latest US consumer inflation report to reveal the impact of tariffs.

S&P 500 futures (ES=F) fell 0.4%, after the broad benchmark surged almost 3.3% on Monday as investors celebrated the tariff reduction deal. Dow Jones Industrial Average futures (YM=F) inched down 0.2%, while contracts on the tech-heavy Nasdaq 100 (NQ=F) dropped 0.4%.

Stocks have hit pause on the deal-driven buying frenzy as investors brace for their first glimpse into how President Trump's trade offensive has impacted inflation. April's Consumer Price Index, due at 8:30 a.m. ET, is expected to show price pressures picked up in the wake of the "Liberation Day" tariff hikes.

While the brunt of the tariffs' impact likely won't be seen for some time, bond traders are watching the consumer inflation print for clues to the Federal Reserve's path for interest rates. Markets are pricing in the first 0.25% rate cut in September, compared with previous expectations for June.

Read more: The latest on Trump's tariffs

Corporates are already bracing for a tariffs bruising. Honda (HMC, 7267.T) on Tuesday became the latest automaker to put out a warning, saying it expects a $3 billion hit to full-year profit from Trump's new auto duties. Shares in the Japanese company fell almost 5% in premarket trading on Wall Street.

Elsewhere on the earnings front, results from JD.com (JD) and Under Armour (UAA, UA) are expected to land later in the day.

LIVE 4 updates

  • Brian Sozzi

    And the BofA fund manager survey says...

    This report is always a fun one to dissect.

    The latest BofA fund manager survey was done just before the new US-China trade agreement. But it still offers a valuable snapshot into investor thinking.

    Fund managers were positioned defensively enough that the "pain trade" could continue in the near-term. That essentially means investors were underweight risk assets (or owned less of them), and may now be forced to chase stocks higher due to a sliver of good trade news.

    Meantime, I thought the below chart was interesting as Goldman Sachs lowered its US recession odds probability to 35% from 45% late Monday.

  • April CPI print expected to show first signs of Trump tariffs' impact on inflation

    Yahoo Finance's Josh Schafer reports:

    April's Consumer Price Index (CPI) is expected to show the first clear signs of inflationary impacts from President Trump's tariffs.

    The report, set for release at 8:30 a.m. ET on Tuesday, will greet investors less than 24 hours after markets soared on news the US and China have placed a 90-day pause on a wide swath of tariffs between the two countries.

    "We expect the first signs of tariff related inflation to show up in the April CPI released on Tuesday," UBS chief economist Jonathan Pingle wrote in a note to clients on Monday. ...

    In the CPI report, headline annual inflation is forecast to come in at 2.4% in April, flat from March's increase. On a month-over-month basis, prices are estimated to rise 0.3%, above the 0.1% decline seen in March.

    On a "core" basis, which strips out the more volatile food and energy costs, CPI is expected to have risen 2.8% over the past year in April, unchanged from the month prior when core inflation hit its lowest level in four years. Meanwhile, monthly core price increases are anticipated to rise 0.3%, ahead of March's 0.1% rise.

    While there will be signs of tariff-related inflation in Tuesday's report, economists argue the full brunt of the new policies' impact on inflation likely won't be seen for several months.

    Read more here.

  • China stocks slide as trade pact undermines stimulus hopes

    Chinese stocks struggled on Tuesday as optimism over the US-China rollback of tariffs was clouded by worries that Beijing will now pull back on measures to stimulate the economy.

    The Hang Seng China Enterprises Index (^HSCE) in Hong Kong ended 2% lower, coming off the prior day's 3% relief rally. Shanghai's onshore benchmark CSI 300 Index (000300.SS) closed 0.2% higher.

    Bloomberg reports:

    Read more here.

  • Gold holds after significant drop

    Gold (GC=F) maintains its loss as the easing of US-China trade tensions has pushed investors out of the safe-haven and into riskier assets.

    Bloomberg reports:

    Read more here.