US stock index futures stabilized on Tuesday after heavy losses in the previous session, triggered by President Donald Trump’s confirmation of new tariffs on Canada and Mexico, which fueled fears of a global trade war.
At 11:20 CET (05:20 ET), Dow Jones futures were down 30 points (0.1%), S&P 500 futures were down 2 points, while Nasdaq 100 futures were up 17 points (0.1%).
Trump’s Tariffs Weigh on Market Sentiment
On Monday, Trump announced a 25% tariff on imports from Canada and Mexico, effective March 4, alongside an increase in tariffs on Chinese goods to 20%, up from 10%. The news sent U.S. stocks tumbling, with the Dow Jones Industrial Average dropping 1.5%, the S&P 500 losing 1.8%—its worst daily performance since December—and the Nasdaq Composite sinking 2.6%.
In response, Canadian Prime Minister Justin Trudeau announced retaliatory tariffs of 25% on approximately $20 billion worth of U.S. products. Meanwhile, China’s Ministry of Finance imposed tariffs of up to 15% on U.S. chicken, wheat, corn, and cotton, while soybeans, sorghum, pork, beef, fruits, vegetables, and dairy products would face a 10% tariff.
Citi analysts warned that S&P 500 earnings estimates might not fully reflect the risks posed by these tariffs. While strong fourth-quarter earnings had set a positive tone for 2025, Citi expects downward revisions to consensus earnings forecasts, which typically bottom out in mid-April.
“For now, most analysts, including us, are on hold. While we can perform sensitivity analyses, we need more clarity before incorporating the effects of these policies into our base-case assumptions,” Citi strategists said.
Fed’s Williams in the Spotlight Amid Economic Concerns
On Monday, data from the Institute for Supply Management (ISM) showed that new orders in the U.S. manufacturing sector had fallen into contraction, signaling weaker future demand and raising concerns about slowing economic growth.
With no major economic reports scheduled for Tuesday, investors will closely watch remarks from New York Federal Reserve President John Williams, whose comments may provide insight into monetary policy and interest rate expectations.
Retail Earnings in Focus
Several major retailers, including Best Buy (BBY), Target (TGT), AutoZone (AZO), and CrowdStrike (CRWD), will release earnings reports on Tuesday. Their future guidance will be analyzed to assess consumer spending trends amid ongoing economic uncertainty.
Oil Prices Decline on Trade War Concerns
Crude oil prices fell on Tuesday as traders evaluated the potential for a global trade war and the possibility that major producers may increase oil output next month.
As of 05:20 ET:
- U.S. crude oil futures (WTI) fell 1.1% to $67.63 per barrel.
- Brent crude dropped 1.3% to $70.68 per barrel, nearing a three-month low.
The decline followed OPEC+’s announcement on Monday that it would proceed with its planned April production increase of 138,000 barrels per day—its first production hike since 2022.
Additionally, escalating trade tensions between the U.S. and China, the world’s two largest economies, have overshadowed geopolitical risks, including rising tensions in the Russia-Ukraine conflict after the U.S. decision to halt military aid to Ukraine.
