US Stocks Pull Back Amid AI Optimism Waning, Trump Tariff Plans Await Clarity
Pre-market trading witnessed a dip in US stocks on Thursday, as investors retreated from a push for fresh records amid waning AI enthusiasm and anticipation for details on President Trump's tariff plans.
S&P 500 futures (ES=F) declined approximately 0.2%, breaking a three-day winning streak that brought the index close to an all-time high on Wednesday. Dow Jones Industrial Average futures (YM=F) remained largely unchanged, still within reach of a record.
Nasdaq 100 futures (NQ=F) fell 0.5%, underscoring the struggle of tech stocks to sustain momentum following the previous day's gains. Nvidia (NVDA), Apple (AAPL), and Alphabet (GOOG, GOOGL) all faced pre-market declines.
Investors are grappling with the early policy initiatives of President Trump, which included an AI push that initially bolstered tech stocks, but left uncertainties regarding the timing of tariffs on major trading partners – a potential risk for inflation and equity markets.
Attention now shifts to Trump's speech at the World Economic Forum in Davos, expected to provide further insight into his trade policy.
Amazon (AMZN) and Tesla (TSLA) experienced slight downward movement following recent business shifts in Canada, a potential target of Trump's tariffs. Amazon plans to close warehouses in Quebec, affecting 1,700 jobs, while Tesla intends to implement substantial price hikes on its EV models in Canada.
Earnings reports are anticipated to provide some impetus for the markets, following the positive tone set by Netflix (NFLX). GE Aerospace (GE) shares rose on reports of strong full-year profits and plans to increase share buybacks and dividends. Conversely, American Airlines (AAL) stock declined amid a disappointing 2025 profit forecast. Texas Instruments (TXN) and Alaska Airlines (ALK) are also set to release quarterly reports on Thursday.
On the economic front, data on initial jobless claims in the past week will influence expectations for the Federal Reserve's interest rate path.