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US stock futures experienced slight gains as investors weighed President Donald Trump’s recent tariff threats, disappointing economic data, and mixed earnings reports from major companies. Contracts on the S&P 500 increased by 0.2%, while Nasdaq 100 futures remained flat. The gains came after positive earnings results from McDonald’s Corp. and Shopify Inc., which saw their stocks rise in premarket trading.
Some prominent companies released their earnings reports, which gave mixed signals to the investors. McDonald's and Shopify witnessed immense growth after the positive earnings reports, which outran analysts' expectations and led to increased stock prices. Meanwhile, the performances of other large companies showed weaker results.
Both Uber Technologies Inc. and Walt Disney Co. posted disappointing earnings, and their share prices declined. Furthermore, Super Micro Computer Inc. experienced a dramatic rebound of more than 17% following the company's revision of its annual sales forecast downwards.
Advanced Micro Devices Inc. (AMD) also experienced a decline as the company did not provide strong guidance on its sales in China, a key market for semiconductor firms. However, the earnings season overall has been relatively strong, with most companies reporting positive growth. Investor sentiment, however, remains cautious, with the broader economic landscape still appearing to be facing concerns.
Investor uncertainty has increased with President Trump's tariff threats. The president revealed that the US will apply new tariffs on nations that buy energy supplies from Russia and import semiconductors and pharmaceuticals. This will increase the tariffs and may complicate an already existing trade tension, adding more volatility to the markets.
In addition to the tariff concerns, economic data revealed a weakening US services sector, with sticky price pressures that could exacerbate the Federal Reserve’s challenges in managing monetary policy.
On Tuesday, economic indicators revealed that a slowdown in US services was recorded, leading to further doubts concerning the path the economy is heading. This is after the poor job figures last week that resulted in high speculations over what the Fed will do next concerning inflation and economic downturn.
The US market faced some volatility, whereas the global market experienced mixed signals. In Europe, the Stoxx 600 benchmark index was nearly unchanged after an early gain of 0.4%. European corporations varied reports, with Fresenius SE and Bayer AG showing profitable earnings, whereas Glencore Plc and Beiersdorf AG showed poor results. Further, data on German factory orders revealed an unexpected decline, which further raised concerns about the Eurozone’s economic stability.
In commodity markets, the oil price rose after a four-day slide, as investors waited for Trump's tariff decision on Russian energy. The reaction of the commodity markets is crucial because any new tariffs would have implications for the global energy price.
Also Read: Stock Market Today: Dow, Nasdaq, S&P 500 Climb Amid Rate Cut Hopes and Tariff Concerns
Despite some positive earnings reports, the prevailing sentiment among investors is that macroeconomic factors, particularly tariff policies and economic growth, will have a more significant influence on the markets than corporate earnings. Jon Bell, a portfolio manager at Newton Investment Management, emphasized that the uncertainty surrounding tariff levels and global trade policies is likely to persist, keeping investors on edge.
The 10-year yield hit 4.23%, two basis points higher, after a modest fall in Treasuries, before an auction. The gains in yield are achieved with the anticipation of further pressure on the bond market over the broader economic conditions. Nevertheless, the US dollar was also not very volatile, as the Bloomberg Dollar Spot Index did not make a notable change.
