US Stock Futures Pull Back Amid Escalating US-China Trade War

U.S. stock futures retreated Wednesday as tensions surrounding the Trump administration's trade war with China intensified and investors grappled with corporate earnings reports.

Tech Sector Under Pressure

The tech-heavy Nasdaq 100 futures (NQ=F) led declines, falling 0.7%, while S&P 500 futures (ES=F) dropped 0.5% after disappointing results from Google parent Alphabet (GOOG, GOOGL) and chipmaker AMD (AMD).

Trump Tariffs Weigh on Dow Jones

Dow Jones Industrial Average futures (YM=F) slipped 0.2%, following the major indices' close with gains Tuesday. Trump imposed 10% tariffs on Chinese goods, prompting a retaliatory response from Chinese leader Xi Jinping.

Alphabet Feels Heat

Alphabet found itself at the epicenter of the trade war. Ahead of its earnings release, China initiated an antitrust probe into Google, widely seen as a countermeasure to Trump's tariffs. The company's shares fell 7% after disappointing earnings results, despite beating on EPS and meeting revenue expectations.

AMD Earnings Disappoint

AMD's earnings also drew a negative reaction. While revenue exceeded estimates, its CEO's forecast of declining data center sales sent shares down more than 8% in after-hours trading.

Chipotle Meets Expectations, Conservative Guidance

Burrito chain Chipotle (CMG) met Wall Street's earnings projections, but conservative guidance led shares down over 5% after hours.

Disney Earnings on Tap

Entertainment giant Disney (DIS) is scheduled to report earnings on Wednesday. Headwinds are anticipated for Disney's theme parks and Disney+ streaming platform.

Tariffs Expected to Increase, Goldman Predicts

Goldman Sachs chief economist Jan Hatzius anticipates further tariff increases on Chinese imports, beyond the recently announced 10%. However, he does not believe a 60% tariff, as suggested by Trump during his campaign, is the base case.

AMD Growth Concerns

Analysts attribute AMD's stock decline to concerns about slower data center sales growth and lack of clear guidance on GPU revenue.

Chipotle's Weak Outlook

Chipotle's pre-market weakness stems from soft sales guidance, mixed margin commentary, and a sluggish start to January sales.

Toyota Raises Profit Forecast

Despite weaker-than-expected quarterly results, Toyota Motor (TM) raised its full-year operating profit forecast by 9%. The automaker also announced plans to develop and produce electric vehicles in China.

Gold Surges on Trade War Anxiety

Gold (GC=F) reached an all-time high, climbing nearly 1% as investors seek safe havens amid the trade tensions.

Asian Stocks React Negatively

Asian stocks mostly fell Wednesday as markets reacted to the U.S.-China trade escalation. The CSI 300 Index, Nikkei 225, and Hang Seng all declined, while the Kospi gained ground.