US stock futures decline as investors await key trade talks and tariff updates ahead of economic data releases.
U.S. stock index futures retreated Tuesday as market participants braced for renewed trade negotiations and potential tariff escalations. Heightened U.S.-China tensions and key economic data releases later this week added to investor caution, undermining a recent rebound in risk assets.
US Futures Slide as Trade Concerns Weigh on Investor Sentiment
U.S. equity futures edged lower on Tuesday as investors assessed renewed geopolitical frictions and awaited progress in trade negotiations that could reshape the global economic landscape. The cautious tone in markets comes ahead of a potential dialogue between President Donald Trump and Chinese leader Xi Jinping, and amid rising concern over fresh tariffs on steel and aluminum.
By 5:46 a.m. ET, futures tied to the Dow Jones Industrial Average were down 174 points (0.41%), while S&P 500 E-mini futures slipped 26.25 points (0.44%). The tech-focused Nasdaq 100 futures also lost ground, falling 83 points (0.39%) in pre-market trade.
Renewed Trade Pressures
According to a draft letter reviewed by Reuters, the Trump administration is pushing for accelerated trade discussions, urging negotiating partners to submit their final proposals by Wednesday. The move reflects the administration’s intent to resolve trade disputes ahead of a self-imposed deadline just five weeks away.
White House press secretary Karoline Leavitt confirmed that President Trump and President Xi are expected to speak this week, following accusations from the U.S. that China has failed to uphold previous agreements to ease tariffs and trade restrictions.
Investor sentiment took another hit after Trump announced plans to double tariffs on steel and aluminum imports to 50%, effective Wednesday. This aggressive move disrupted what had been a temporary recovery in equity markets, triggered in part by a prior softening of Trump’s trade rhetoric.
Equities Lose Momentum
Despite gains in May — with the S&P 500 and Nasdaq logging their strongest monthly advances since November 2023 — the broader market rally appears to have stalled. The S&P 500 currently trades less than 4% below its all-time high reached in February, but continued trade friction threatens further progress.
“Market sentiment cannot find an anchor since trade policies remain fluid,” noted Kathleen Brooks, Research Director at XTB. She added that the lack of clarity is creating headwinds for risk assets, especially as the summer period typically brings lower trading volumes and higher volatility.
Outlook Downgraded, But Not All Forecasts Are Bearish
The Organisation for Economic Cooperation and Development (OECD) revised its global GDP growth forecast for 2025 downward from 3.1% to 2.9%, citing the negative economic impact of the prolonged U.S. trade war. The organization warned that continued uncertainty could weigh heavily on both investment and consumer confidence.
However, not all projections are bearish. Deutsche Bank raised its year-end target for the S&P 500 from 6,150 to 6,550, citing better-than-expected earnings resilience and reduced impact from tariff-related cost pressures.
Economic Data and Fed Speeches in Focus
Investors are also awaiting the release of key economic indicators that could influence Federal Reserve policy. April factory orders and job openings (JOLTS) are due at 10:00 a.m. ET. Additionally, several Federal Reserve officials, including Board Governor Lisa Cook, Chicago Fed President Austan Goolsbee, and Dallas Fed President Lorie Logan, are scheduled to speak throughout the day.
Later this week, the U.S. Labor Department will release May’s nonfarm payrolls data — a closely watched measure that could offer insights into how trade-related uncertainty is impacting the broader economy.
Stock Movers: Big Tech Slips, Pinterest Jumps
Most megacap and growth stocks posted losses in early trading. Microsoft led the declines with a 0.4% drop. Investor wariness toward high-valuation tech names is growing amid potential regulatory and economic headwinds.
On the upside, Pinterest shares surged 4.1% after J.P. Morgan upgraded the stock from “neutral” to “overweight,” citing strong engagement metrics and monetization potential. Dollar General rose 2.1% ahead of its quarterly earnings report, which is scheduled before the market opens.
