Stock Market Today: Futures Rise on U.S.-China Trade Talk Hopes Ahead of Fed Decision

Market Indexes Poised for Rebound After Tuesday’s Decline

Stock futures are pointing to a higher open on Wednesday, May 7, 2025, as investors react positively to news of upcoming U.S.-China trade talks while awaiting the Federal Reserve’s interest rate decision later today. As of early morning trading, Dow Jones Industrial Average futures are up approximately 196 points (0.48%), S&P 500 futures have gained 0.49%, and Nasdaq 100 futures are higher by about 0.5%.

This comes after Tuesday’s significant decline, when the Dow dropped nearly 400 points (about 1%), while the S&P 500 and Nasdaq Composite both fell around 0.9% amid renewed tariff concerns.

Trade Talks Spark Market Optimism

The market’s positive sentiment stems from announcements that U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer will travel to Switzerland later this week for trade talks with Chinese officials led by Vice Premier He Lifeng. This marks the first confirmed trade negotiations between the two economic powerhouses since President Trump announced sweeping tariffs last month.

In an interview with Fox News, Secretary Bessent indicated that the talks would focus on “deescalation rather than a big trade deal,” adding that “we’ve got to deescalate before we move forward.” The prospect of progress in resolving trade tensions has provided a much-needed boost to market sentiment after weeks of uncertainty.

All Eyes on the Federal Reserve

Today’s Federal Reserve interest rate decision, expected at 2 p.m. ET, remains a key focus for investors. According to CME’s FedWatch tool, there’s a nearly 97% probability that the central bank will maintain current interest rates.

Market participants will closely analyze Fed Chair Jerome Powell’s post-decision press conference for insights into the central bank’s outlook on inflation, economic growth, and how potential tariffs might impact monetary policy. The meeting comes at a particularly sensitive time, as President Trump has been critical of Powell, stating his “termination cannot come fast enough,” though he later said he has “no intention” of removing the Fed chief.

Major Earnings Reports Today

Several major companies are reporting earnings today, including:

– Uber Technologies (UBER): Expected to report Q1 earnings of $0.51 per share, representing a 259.38% increase compared to the same quarter last year.

– Walt Disney Company (DIS): Analysts forecast Q1 earnings of $1.18 per share, a 2.48% decrease from the same period last year.

– Novo Nordisk (NVO): The pharmaceutical giant reported better-than-expected profit but lowered its full-year sales growth forecast due to weaker sales of its blockbuster Wegovy weight loss drug.

Other notable companies reporting today include Emerson Electric (EMR), Johnson Controls (JCI), Barrick Gold (GOLD), and Rockwell Automation (ROK).

International Markets and Economic News

Asian markets showed mixed performance, with Hong Kong’s Hang Seng index jumping over 2% after China’s central bank announced plans to cut key interest rates to boost economic growth. The People’s Bank of China reduced its seven-day reverse repurchase rate to 1.4% from 1.5% and announced a cut to the reserve requirement ratio that will release approximately 1 trillion yuan ($139 billion) in liquidity.

In Europe, German factory orders rose 3.6% in March, significantly exceeding the median estimate of 1.3%, signaling improvement in Europe’s largest economy prior to the U.S. tariff announcements.

Looking Ahead

As trading begins on Wednesday, investors will be monitoring both the Fed’s decision and any developments in the U.S.-China trade negotiations. The market’s recent volatility highlights ongoing concerns about how potential tariffs might impact inflation, supply chains, and overall economic growth. With major earnings reports and critical economic decisions on the horizon, May 7 promises to be a pivotal day for market direction in the coming weeks.