U.S. stock futures pointed to a stronger open on Tuesday, suggesting the market could extend Monday’s modest gains. Investor sentiment appeared to improve further ahead of the opening bell, driven in part by upbeat inflation data and optimism surrounding Nvidia.
Nvidia (NASDAQ:NVDA) surged 4.7% in premarket trading, positioning itself as a potential market leader in early action. The rally followed an announcement that the chipmaker would soon resume sales of its H20 AI processors in China.
“The U.S. government has assured NVIDIA that licenses will be granted, and NVIDIA hopes to start deliveries soon,” the company stated, bolstering enthusiasm among investors eager for signs of a thaw in U.S.-China trade tensions.
Also supporting market momentum was the release of the latest Consumer Price Index (CPI) data from the Labor Department. The June CPI rose 0.3%, in line with forecasts, following a 0.1% increase in May. Year-over-year inflation accelerated to 2.7% from May’s 2.4%, slightly above the expected 2.6% increase.
The core CPI—which excludes food and energy—rose 0.2% in June, matching expectations and improving on May’s 0.1% increase. On an annual basis, core inflation edged up to 2.9%, exactly as economists predicted.
The data provided reassurance that inflation is progressing toward the Federal Reserve’s target, which could help shape monetary policy expectations heading into the second half of the year.
On Monday, stocks managed modest gains after a choppy session. The Nasdaq advanced 54.80 points, or 0.3%, ending at 20,640.33. The Dow Jones Industrial Average added 88.14 points, or 0.2%, closing at 44,459.65, while the S&P 500 rose 8.81 points, or 0.1%, to 6,268.56.
These gains came despite escalating trade rhetoric from former President Donald Trump, who reiterated plans to impose significant tariffs starting next month. He said on Truth Social that the U.S. has suffered “trillions of dollars” in trade losses over the years.
“Countries should sit back and say, ‘Thank you for the many year’s long free ride, but we know you now have to do what’s right for America,’” Trump said. “We should respond by saying, ‘Thank you for understanding the situation we are in. Greatly appreciated!’”
In response, the European Union opted to hold off on retaliatory measures. European Commission President Ursula von der Leyen commented during a news conference, “We will therefore also extend the suspension of our countermeasures till early August. At the same time, we will continue to prepare further countermeasures so we are fully prepared.”
She added, “We have always been very clear that we prefer a negotiated solution. This remains the case, and we will use the time that we have now till the 1st of August (to negotiate).”
The EU’s retaliatory tariffs—originally scheduled to take effect Monday—targeted $25 billion worth of American goods in response to a prior U.S. move to tax European steel and aluminum.
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