Investing.com - U.S. stock futures edged lower on Wednesday, with markets gauging uncertainties around geopolitics and trade, as well as the upcoming release of minutes from the Federal Reserve’s latest gathering. U.S. President Donald Trump says he will probably meet with Russian counterpart Vladimir Putin before the end of the month following a summit between representatives from both countries on Tuesday. Elsewhere, Elon Musk’s social media platform X is reportedly in talks to raise money at a $44 billion valuation.
1. Futures choppy
U.S. stock futures turned lower, erasing modest earlier gains, as investors assessed the outcome of extraordinary talks between the U.S. and Russia on ending the war in Ukraine as well as a fresh tariff threat from President Trump.
By 06:17 ET (11:17 GMT), the Dow futures contract had fallen by 66 points or 0.2%, S&P 500 futures had dropped by 6 points or 0.1%, and Nasdaq 100 futures had declined by 11 points or 0.1%.
The main averages on Wall Street all closed higher on Tuesday after oscillating around the flatline for much of the session, with the benchmark S&P 500 in particular notching a new all-time peak. In individual stocks, shares in Intel (NASDAQ:INTC) soared on a report that peers Taiwan Semiconductor Manufacturing Co. and Broadcom (NASDAQ:AVGO) were mulling deals that would cleave the chipmaker in two, Constellation Brands’ (NYSE:STZ) stock price climbed after Warren Buffett’s Berkshire Hathaway (NYSE:BRKa) unveiled a new investment in the group.
Uncertainty around the geopolitical environment and a ratcheting up in international trade tensions are both looming in the background of a holiday-shortened trading week, although analysts noted that there were no major alterations to recent developments that have driven markets.
"The long holiday weekend produced a lot of news, but after sifting through everything, one finds the narrative largely the same as before," analysts at Vital Knowledge said in a note to clients.
2. Fed minutes ahead
One potential catalyst for equities could come on Wednesday from the release of minutes from the Federal Reserve’s latest policy meeting, when the central bank chose to leave interest rates steady and signaled a wait-and-see approach to future possible borrowing cost reductions.
Investors are hoping that the minutes could provide more insight into how Fed policymakers expect the path of rates to evolve in the coming months.
Officials have previously cited concerns that Trump’s sweeping tariff plans could refuel inflationary pressures as one reason for their relative caution around the outlook for rates. Recent data have also pointed to a potential reacceleration in price growth, as well as declining consumer sentiment and dropping retail sales.
Several policymakers have backed their decision in January to push pause on a series of rate cuts that stretched back into 2024, highlighting an inflation rate above the Fed’s 2% target level and resilience in the broader economy.
3. Trump hints at Putin summit
Trump suggested on Tuesday that he could meet with Russian President Vladimir Putin before the end of February, adding that Moscow "wants to do something" to halt the war in Ukraine after talks between U.S. and Russian representatives.
The meeting in Saudi Arabia yielded promises of more negotiations, although media reports said Russia’s demands had hardened, especially its stance against Ukraine receiving NATO membership.
Critics of Trump also hit out at Kyiv’s absence from the talks in Riyadh, which were the first between the U.S. and Russia since the conflict in Ukraine broke out in 2022. Ukraine has stated that it will not accept a peace deal made on its behalf, a remark that was reiterated by German Chancellor Olaf Scholz.
4. Trump eyes 25% tariff on imported cars
Meanwhile, Trump said he would slap tariffs on cars imported into the U.S. "in the neighborhood of 25%," as well as other duties on semiconductors and pharmaceutical products.
It was the latest update to what has become a frequent drumbeat of tariff threats issued by Trump since he was sworn for his second term in the White House last month.
The president said last week that widespread reciprocal levies could be imposed as soon as April 2, a day after a deadline for his staff to present proposals for the sweeping tariffs that may upend global trade.
In prior weeks, Trump has also placed a 10% duty on Chinese goods and has set a March 12 date to impose tariffs on steel and aluminum imports. He announced 25% tariffs on U.S. neighbors Canada and Mexico as well, although later delayed them for a month after receiving concessions on border security.
"We doubt that Donald Trump’s reciprocal tariff threat, nor his broader protectionist agenda, are priced in markets fully," analysts at Capital Economics said in a note to clients. "We expect U.S. Treasury yields and the dollar to edge up as these tariffs come into effect."
5. Elon Musk’s X in talks to raise capital at $44 bln valuation - Bloomberg News
Elon Musk’s social media platform X is in talks to raise funding at a $44 billion valuation, Bloomberg News reported on Wednesday, citing people familiar with the matter.
The valuation matches the original price paid by Musk for Twitter in 2022, with the potential funding round marking a major turnaround for the company. X was seen dropping sharply in valuation since Musk’s takeover and rebranding, as it grappled with an advertiser rout. Musk fired a bulk of Twitter’s staff, including its content moderation team, much to the chagrin of advertisers.
But recent reports showed that investors were once again warming up to X, especially as user activity surged in the wake of the 2024 U.S. presidential election. Musk also noted an improvement in the company’s finances.