US Stocks Positive Further Prior To Inflation Data

After rallying during the trading session on Monday, U.S. stock index futures gained higher again during Tuesday’s pre-market trading. The markets were steady as investors looked forward to a number of economic data to be released which includes the inflation data. Wall Street shares rallied during the previous session due to the upbeat employment data in the country released last week.

Markets on Edge

Despite the gains logged by most U.S. futures during the past couple of trading sessions, the markets were previously shaken by U.S. President Donald Trump’s announcement of steel and aluminum tariffs on imports of the said products. The declaration which was already signed by Trump is expected to be effective in the next couple of weeks. The Dow Jones Industrial average lost as much as 150 points over the past week due to the tariff announcement.

The announcement of Gary Cohn's resignation, who happens to be one of Trump's main economic advisers also pushed US stocks over the past couple of trading sessions. Cohn is known for being a free-trade supporter.

This will impose a tariff of 10% on aluminum imports and a charge of 25% on steel imports. However, Canada and Mexico are exempted from the tariff. This concerned the markets of a possible retaliation from countries outside the United States due to the said tariffs.

Most U.S. stocks recovered at the beginning of the week on the back of a positive labor or employment data. According to the U.S. Labor Department, around 313,000 additional jobs were recorded last month beating most economists expectations. Aside from U.S. stocks, most global stocks including those coming from Asia and Europe also recorded gains.

US Stock Market Direction

While most stock index futures showed an upbeat direction prior to the opening trading session on Tuesday, the Dow Jones Industrial Average was down by around 0.5% later on Monday’s session due to ongoing fears regarding Trump’s announcement to impose tariffs on metals such as steel and aluminum. This is due to the expectations that companies such as Boeing and Caterpillar would be weighed down by the declaration.

The NFIB Small Business Optimism Index is expected to be released during the pre-market trading while the whole core consumer price index (CPI) data will be released after the market opens. 

Aside from the inflation report and consumer price index data, the market is also expecting the minutes of Bank of Japan’s most recent monetary policy meeting. The markets would be looking at the upcoming inflation report to look for any signs of the market's current condition and to predict the U.S. Federal Reserve’s next move regarding its monetary policy tightening.

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