Wall Street was barely higher in early trading on a mostly quiet Tuesday as markets adjust to the reality that inflation is no longer the dominant theme of the U.S. economy.
Futures for the S&P 500 and the Dow Jones industrials each rose about 0.1% before the bell.
Several economic reports coming later in the week could offer more context about where the U.S. economy stands. On Thursday, the government will offer the final revision for the U.S. economy’s growth in the spring as well as its latest weekly data on layoffs. Another on Friday will give a look at how much U.S. consumers are spending.
Such reports, particularly on employment, are taking top priority on Wall Street because the main fear is now a slowdown in the job market. It’s a notable shift from prior years, when Wall Street’s attention was fixed on anything related to inflation.
But now that inflation has come down substantially from its peak two summers ago, the Fed has shifted gears.
It feels less need to keep rates high in order to slow the economy enough to stifle inflation, hence last week’s cut of half a percentage point to its main interest rate. And it feels more pressure to prop up the job market and overall economy, hence its plans to keep cutting interest rates this year and next.
Coming later Tuesday is the Conference Board's consumer confidence report, a closely watched index that measures the mood of the American consumer.
Shares of farming equipment Deere & Co. were down about 1% before the opening bell after former President Donald Trump threatened the company with a 200% tariff — should he win back the presidency — if it exports manufacturing to Mexico. Deere announced in June it was moving skid steer and track loader manufacturing to Mexico and working to acquire land there for a new factory. Trump, the Republican presidential nominee, made the comments at a campaign event in Pennsylvania to a group of farmers.
Visa slid more than 2% after media reports that the credit card issuer was going to be sued by the U.S. Department of Justice for penalizing customers who use other payment processors.
Boeing shares were stagnant after the aerospace giant said it made a “best and final offer” to 33,000 striking machinists that includes bigger raises and larger bonuses. The workers’ union said the proposal isn’t good enough and there won’t be a ratification vote before Boeing’s deadline at the end of the week.
Elsewhere, Chinese markets logged the biggest gains after Beijing announced a slew of measures to support the faltering economy.
Shares in Hong Kong and Shanghai jumped more than 4% and the optimism spilled into other markets.
In the broadest and most coordinated effort so far, People’s Bank of China Gov. Pan Gongsheng said the reserve requirement for banks would be cut by 0.5 percentage points and that the central bank would follow up with further cuts. That would free up more money for lending.
The central bank also will reduce interest rates on its loans to commercial banks and cut the down payment requirement on purchases of second homes to 15% from 25%.
For once, investors who showed little enthusiasm for earlier, more cautious moves, appeared impressed. Major developer Shimao Group Holdings' Hong Kong-traded shares jumped 15.1% and Longfor Group Holdings' rose 5.6%.
The Hang Seng in Hong Kong surged 4.1% to 18,985.15, while the Shanghai Composite index picked up 4.2% to 2,863.13.
Tokyo's Nikkei 225 index climbed 0.6% to 37,940.59, while the Kospi in Seoul jumped 1.1% to 2,631.68.
Australia's S&P/ASX 200 fell 0.1% to 8,142.00 after the central bank kept its benchmark rate unchanged and suggested it won't cut rates until next year.
In European trading at midday, Germany’s DAX picked up 0.6% and the CAC 40 in Paris climbed 1.3%. Britain’s FTSE 100 was up 0.2%.
In the bond market, the yield on the 10-year Treasury rose to 3.79%, up from 3.75% late Monday. The yield on the two-year Treasury, which moves more with expectations for Fed action, edged up to 3.60% from 3.59% late Friday.
In other dealings early Tuesday, U.S. benchmark crude oil added $1.63 to $72 per barrel. Brent crude, the international standard, was up $1.53 at $74.74 per barrel.
The U.S. dollar rose to 143.84 Japanese yen from 143.61 yen. The euro was trading at $1.1137, up from $1.1113.
On Monday, the S&P 500 rose 0.3% to 5,718.57, edging past its record set on Thursday. The Dow Jones Industrial Average added 0.1% to its own all-time high set on Friday and closed at 42,124.65. The Nasdaq composite gained 0.1% to 17,974.27.
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