US Stock Futures Trade Higher On Wednesday: S&P 500 Is Flashing 'Quite Rare And Rather Bullish' Signal, Says Expert (UPDATED)

Editor’s Note: This story has been updated to include the latest data.

U.S. stock futures reversed early losses to trade in the green during Wednesday’s premarket session, following a mixed finish on Tuesday. The S&P 500 and Nasdaq 100 indices turned positive for the year after Tuesday’s advance.

A positive inflation report for April and easing trade concerns boosted investor sentiment, but the tech sector’s gains were largely driven by chipmaker Nvidia Corp. NVDA. The company’s stock soared thanks to both an expected overhaul of chip regulations and a new collaboration with Saudi Arabia.

The 10-year Treasury bond yielded 4.45% and the two-year bond was at 3.99%. The CME Group’s FedWatch tool’s projections show markets pricing a 91.8% likelihood of the Federal Reserve keeping the current interest rates unchanged in its June meeting.

Futures	Change (+/-)
Dow Jones	0.05%
S&P 500	0.22%
Nasdaq 100	0.36%
Russell 2000	0.08%

The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, were trading higher in premarket on Wednesday. The SPY was up 0.22% to $588.11, while the QQQ advanced 0.37% to $517.48, according to Benzinga Pro data.

Cues From Last Session:

Information technology, consumer discretionary, energy and communication services sectors saw the biggest gains on Tuesday. Whereas health care, consumer staples, and real estate sectors declined.

The Labor Department’s Tuesday report showed a 2.3% year-over-year rise in the Consumer Price Index for April, below the 2.4% economist expectation, while core CPI’s 2.8% increase matched estimates.

After Tuesday, the S&P 500 index turned positive for the year, up 0.31% year-to-date. Meanwhile, Dow Jones was still down -0.59% YTD, and Nasdaq 100 was up 1.06%.

The Dow Jones index declined 270 points or 0.64% to 42,140.43, whereas the S&P 500 index rose 0.72% to 5,886.55. Nasdaq Composite ended 1.61% higher at 19,010.08, and the small-cap gauge, Russell 2000, climbed 0.49% to 2,102.35.

Index	Performance (+/-)	Value
Nasdaq Composite	1.61%	19,010.08
S&P 500	0.72%	5,886.55
Dow Jones	-0.64%	42,140.43
Russell 2000	0.49%	2,102.35

Insights From Analysts:

According to Ryan Detrick, chief market strategist for the Carson Group, a recent market observation is signaling potential for further gains.

Detrick noted that on Tuesday, over 60% of the S&P 500 components reached new 20-day highs, highlighting the historical bullish implications of this infrequent event.

As Detrick stated in a post on X, “This is quite rare and rather bullish. Strong performance across the board and higher a year later 18 out of 18 times.”

The market is flashing another bullish signal that could indicate even more gains ahead, according to Ryan Detrick, chief market strategist for the Carson Group.

Detrick observed that on Tuesday, more than 60% of the components in the S&P 500 are hitting new 20-day highs and pointed to a historically bullish year following this rare occurrence.

“This is quite rare and rather bullish. Strong performance across the board and higher a year later 18 out of 18 times,” Detrick wrote in a post on X.

Wharton Professor of Finance and WisdomTree Senior Economist Jeremy Siegel expressed significant optimism regarding the recently announced U.S.-China trade deal, stating it was “a lot better than anyone was anticipating,” and predicting it will “stay that way.”

Speaking on CNBC’s “Squawk On The Street” on Tuesday, Siegel described it as an “amazing” deal benefiting all, including market participants.

He noted, “There was no analyst out there that predicted that we’d come to an agreement — at least a tentative agreement — so quickly, and actually specify tariff levels as low as they came in. It was like, wow, this is great news.”

Siegel pointed out that with previous forecasts from Trump suggesting tariff reductions to the 50% to 80% range, the 30% announcement surprised markets and triggered a substantial rally. He further told CNBC that he expects the agreement to endure, stating he doesn’t believe the two major economies will reimpose higher tariffs as trade tensions have “settled down.”

While acknowledging potential “small adjustments” and that tariffs won’t have “zero effect” given the current 17% average tariff for U.S. consumers (the highest in 85 years), Siegel said, “But it’s certainly going to have a lot less effect than what it seemed like just a week ago.”

The economist anticipates a likely increase in inflation in June or July due to tariff impacts on earnings and growth, but doesn’t foresee this lasting long-term.

He suggested that the Fed should cut rates if conditions worsen and then raise them if they improve, contrasting this with the common expectation of a rate-cutting cycle and the Fed’s emphasis on data dependence.

Siegel believes this approach is flawed, noting that while near-term inflation could rise due to supply shocks, long-term indicators appear stable. Finally, he observed, “The good news is that the tone of Trump is so much different now than it was two or three months ago,” hinting at the possibility of more trade agreements in the future.

See Also: How to Trade Futures

Upcoming Economic Data

Here’s what investors will keep an eye on Wednesday:

• Fed Governor Christopher Waller will speak at 5:15 a.m., Fed Vice Chair Philip Jefferson will speak at 9:10 a.m., and San Francisco Fed President Mary Daly will speak at 5:40 p.m. ET.

Stocks In Focus:

• American Eagle Outfitters Inc. AEO dropped 14.47% in premarket on Wednesday after it reported preliminary results for the first quarter and withdrew its full-year guidance.

• Cisco Systems Inc. CSCO was up 0.15% as analysts expect the San Jose, California-based company to report quarterly earnings at 92 cents per share, up from 88 cents per share in the year-ago period, after the closing bell.

• Endava PLC ADR DAVA jumped 5.09% as it is expected to report before the opening bell. Analysts expect the U.K.-based company to report quarterly earnings at 31 cents per share, compared to 22 cents per share in the year-ago period.

• Dynatrace Inc. DT advanced 1.78% as analysts expect the Waltham, Massachusetts-based company to report quarterly earnings at 30 cents per share, compared to 30 cents per share in the year-ago period. The results will be announced before the opening bell.

• Nvidia Corp. NVDA was up 1.90%, continuing the momentum after reports that the United Arab Emirates may receive approval to purchase over a million of its advanced AI processors, while Saudi Arabia pledged up to $600 billion in future U.S. investments, with a focus on technology and infrastructure.

• Innovative Eyewear Inc. LUCY zoomed 48.99% after its first-quarter revenue reached $454,501, up 19% year-on-year, driven by new product launches, including Nautica and Eddie Bauer collections.

• Actelis Networks Inc. ASNS slumped 16.25% after it reported a quarterly loss of $0.22 per share and also posted revenue of $0.72 million, missing estimates during the first quarter.

Commodities, Gold, And Global Equity Markets:

Crude oil futures were trading lower in the early New York session by 1.35% to hover around $62.81 per barrel.

Gold Spot US Dollar fell 0.53% to hover around $3,233.05 per ounce. Its last record high stood at $3,500.33 per ounce. The U.S. Dollar Index spot was lower by 0.62% at the 100.3810 level.

Asian markets ended higher on Wednesday except Japan’s Nikkei 225 index. India’s S&P BSE Sensex, Hong Kong’s Hang Seng, South Korea’s Kospi, China’s CSI 300, and Australia’s ASX 200 indices advanced. European markets were mostly lower in early trade.

Read Next:

Image Via Shutterstock