Trade Talks Stir Market Anticipation Amid U.S.-China Tensions

U.S. stock index futures remained subdued as investors awaited results of U.S.-China trade talks aimed at resolving tariff disputes. Optimism from last month's preliminary Geneva deal is waning. Key issues include semiconductors and rare earth exports. Investors are also keenly watching U.S. consumer price data and Fed rate decisions.

U.S. stock index futures held steady on Tuesday as the market looked towards the conclusion of trade talks between the U.S. and China. The ongoing discussions aim to alleviate a tariff conflict that has unsettled global financial markets throughout the year.

The initial optimism following a preliminary deal reached in Geneva is fading amidst renewed tensions, with Washington accusing Beijing of hampering exports crucial for industries such as autos and semiconductors. Economic Adviser Kevin Hassett hinted that export controls on some semiconductor items might be lifted if China accelerates rare earth deliveries.

As investors remain cautious, attention is shifting to the upcoming U.S. consumer price data for indications on the Federal Reserve's interest rate decisions. Market participants largely anticipate no changes next week but are aware of potential inflation risks due to existing tariffs.

The prospect of two 25-basis point cuts by the year-end, with a significant chance of a reduction in September, affects expectations. Meanwhile, shares of vaccine manufacturers faced pressure as CDC panel changes were announced.

(With inputs from agencies.)