US Stock Futures Navigate Mixed Signals Amid Trade War Concerns
US stock futures exhibited a mixed performance on Tuesday as investors weighed China's prompt retaliation to President Donald Trump's newly imposed tariffs against a backdrop of escalating trade war apprehensions.
Contracts linked to the Dow Jones Industrial Average (YM=F) marginally declined by approximately 0.2%, while those tracking the S&P 500 (ES=F) hovered marginally below the flatline. Futures associated with the tech-heavy Nasdaq 100 (NQ=F) surged by 0.2%, partially recovering from a recent decline in stock prices.
China's Swift Response
China swiftly reacted to Trump's additional 10% levies on Chinese imports, which took effect on Tuesday. Beijing imposed tariffs of 15% on US coal and liquefied natural gas, effective February 10th, along with 10% duties on imports of crude oil, farm equipment, and select automobiles. These tit-for-tat measures heighten the risk of a full-blown trade war, potentially harming the world's two leading economies.
However, some Wall Street analysts interpret China's response as a sign of restraint, leaving the door open for potential compromise, similar to the US tariff postponement agreements reached with Mexico and Canada.
Optimism and Worries
Contributing to a sense of optimism, Trump indicated the possibility of advancing discussions with Chinese President Xi Jinping. On Monday, he stated that the talks would likely occur "probably over the next 24 hours," rather than later in the week. Meanwhile, the US dollar index (DX-Y.NYB) experienced a slight decline of 0.3% as concerns slightly subsided.
Concurrently, China initiated an antitrust investigation into Alphabet's (GOOG, GOOGL) Google and added Calvin Klein owner PVH (PVH) and biotech company Illumina (ILMN) to its "unreliable entities list."
Alphabet's shares exhibited minimal changes in pre-market trading, as investors anticipate the tech巨头's fourth-quarter earnings report scheduled for release after the closing bell. Key areas of interest include insights into the company's efforts to monetize its significant AI investments and its response to DeepSeek's lower-cost AI models.
Earnings and Economic Indicators
A week packed with earnings reports is underway, with Spotify (SPOT), PayPal (PYPL), AMD (AMD), and Chipotle (CMG) among the notable announcements expected on Tuesday. Despite being less than halfway through the season, the S&P 500's earnings growth remains on track to surpass last year's fourth quarter.
In the pre-market, Palantir (PLTR) reported upbeat news, exceeding analysts' revenue forecasts for the first quarter and full year. As a result, Palantir's shares surged by 18%.
On the economic data front, a reading on job openings in December is scheduled for later release, laying the groundwork for Friday's crucial monthly jobs report.