Futures Pointing To Roughly Flat Open On Wall Street

The major U.S. index futures are currently pointing to a roughly flat open on Tuesday, with stocks likely to show a lack of direction after seeing considerable volatility in the previous session.

Traders may be reluctant to make significant moves as they digest the latest developments regarding President Donald Trump’s tariffs.

While Trump has agreed to pause 25 percent tariffs on imports from Mexico and Canada for a month, China has slapped retaliatory tariffs on U.S. imports in response to a 10 percent trade duty imposed on Chinese goods.

China’s Finance Ministry said it will impose a 15 percent duty on imports of coal and liquefied natural gas from the U.S.

In addition, there will be a 10 percent tariff on imports from the U.S. of crude oil, agricultural equipment and automobiles beginning February 10.

Traders may also stick to the sidelines ahead of the release of the Labor Department’s closely watched monthly jobs report on Friday.

The report, which is expected to show employment climbed by 170,000 jobs in January after jumping by 256,000 jobs in December, could impact the outlook for interest rates.

Stocks moved sharply lower early in the session on Monday but regained ground over the course of the trading day. The major averages climbed well off their worst levels, with the Dow briefly reaching positive territory, but ended the day in the red.

After plunging by as much as 2.5 percent in early trading, the tech-heavy Nasdaq finished the session down 235.49 points or 1.2 percent at 19,391.96. The S&P 500 also slid 45.96 points or 0.8 percent to 5,994.57, while the Dow fell 122.75 points or 0.3 percent to 44,421.91.

The recovery attempt by stocks came after President Donald Trump confirmed he has reached an agreement with Mexican President Claudia Sheinbaum to pause recently implemented tariffs on Mexico for one month.

The tariff pause comes after Sheinbaum said Mexico will immediately reinforce its northern border with 10,000 members of its National Guard to prevent drug trafficking from Mexico to the United States, particularly fentanyl.

Stocks moved sharply lower in early trading amid concerns about a global trade war after Trump officially imposed a 25 percent tariff on imports from Canada and Mexico and a 10 percent tariff on imports from China.

A statement from the White House said Trump is taking “bold action to hold Mexico, Canada, and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country.”

Trump also threatened possible tariffs against the United Kingdom and the European Union, marking a significant escalation.

Canada and Mexico ordered retaliatory tariffs on American goods, while China vowed countermeasures. The EU also warned of firm retaliation if targeted.

Investors fear that a trade war could hit the earnings of major companies and dent global growth. The tariffs could also lead to renewed inflation fears, leading the Federal Reserve to keep interest rates on hold for longer.

Computer hardware stocks regained ground after an early sell-off but still ended the day significantly lower, dragging the NYSE Arca Computer Hardware Index down by 2.6 percent.

Considerable weakness also remained visible among housing stocks, as reflected by the 2.4 percent slump by the Philadelphia Housing Sector Index.

Airline, semiconductor and banking stocks also saw notable weakness, while gold stocks moved higher along with the price of the precious metal.

Commodity, Currency Markets

Crude oil futures are plunging $1.91 to $71.25 a barrel after climbing $0.63 to $73.16 a barrel on Monday. Meanwhile, after jumping $22.10 to $2,857.10 an ounce in the previous session, gold futures are inching up $6.20 to $2,863.30 an ounce.

On the currency front, the U.S. dollar is trading at 155.34 yen compared to the 154.73 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0331 compared to yesterday’s $1.0344.

Asia

Asian stocks gave up some early gains but still ended higher on Tuesday as China slapped tariffs on U.S. imports in a rapid response to a 10 percent trade duty imposed by the Trump administration on Chinese goods.

China’s Finance Ministry said it will impose a 15 percent duty on imports of coal and liquefied natural gas from the U.S.

In addition, there will be 10 percent additional duty on imports from the U.S. of crude oil, agricultural equipment and automobiles from February 10.

China’s Commerce Ministry also imposed export controls on tungsten, tellurium, molybdenum, bismuth, and indium to protect national security interests. China is a top producer of rare earths and exotic materials.

Calvin Klein owner PVH Corp. and biotechnology firm Illumina have been added to the list of unreliable entities after the two companies took what China called “discriminatory measures against Chinese enterprises” and “damaged” legitimate rights and interests of Chinese companies.

In another significant development, China’s regulatory body said it would begin an antitrust investigation into Google over alleged anti-competitive market behavior.

Earlier, Trump had agreed to pause tariffs on Mexico and Canada for a month but gave China no such relief.

The dollar rebounded after an initial retreat, sending gold prices lower in late Asian trading. Oil prices fell sharply, with WTI crude futures falling nearly 2 percent as supply disruption fears eased and trade war worries mounted.

Markets in mainland China remained closed for the Lunar New Year holidays.

Hong Kong’s Hang Seng Index soared 2.8 percent to 20,789.96, with tech stocks such as Baidu and Alibaba surging 3-4 percent.

Japanese markets rose notably as the yen attracted fresh sellers amid worries that Japan will also be an eventual target for Trump’s tariffs.

The exporter-heavy Nikkei 225 Index climbed 0.7 percent to 38,798.37, while the broader Topix Index settled 0.7 percent higher at 2,738.02. Automakers Nissan, Honda and Toyota rose 1-2 percent.

South Korea’s Kospi jumped 1.1 percent to close at 2,481.69, led by tech stocks. Market heavyweight Samsung Electronics rallied 3.3 percent.

Australian markets erased early gains to end on a flat note after China retaliated with new tariffs on U.S. imports. Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index closed 0.7 percent higher at 12,905.04.

Europe

European shares are turning in a lackluster performance on Tuesday as new U.S. tariffs of 10 percent on Chinese imports took effect and China announced retaliatory tariffs and export controls, raising fears of a trade war between the world’s two largest economies.

While the U.K.’s FTSE 100 Index is down by 0.2 percent, the German DAX Index is up by 0.2 percent and the French CAC 40 Index is up by 0.3 percent.

Vodafone shares have slumped in London. The telecom operator reported another revenue decline in its key German market in the third quarter.

Diageo, the world’s top spirits maker, has also tumbled after scrapping its long-standing sales growth guidance.

Swiss bank UBS has also shown a notable move to the downside despite posting better-than-expected profit for the final quarter of 2024.

Meanwhile, Infineon Technologies has soared. The German chipmaker lifted its full-year sales guidance after posting higher-than-expected revenue in the first quarter.

French lender BNP Paribas has also jumped after announcing a new share buyback and higher-than-expected dividend.

U.S. Economic News

The Labor Department is scheduled to release its report on job openings in the month of December at 10 am ET. Job openings are expected to dip to 8.0 million in December after rising to 8.1 million in November.

Also at 10 am ET, the Commerce Department is due to release its report on new orders for manufactured goods in the month of December. Factory orders are expected to decrease by 0.7 percent in December after falling by 0.4 percent in November.

Atlanta Federal Reserve President Raphael Bostic is scheduled to speak on housing in a moderated conversation before a National Housing Crisis Task Force Meeting at 11 am ET.

At 2 pm ET, San Francisco Federal Reserve President Mary Daly is due to participate in a hybrid discussion on “The Economy 2025: the Impacts of Tariffs, Tax Cuts and Trump” before the Commonwealth Club World Affairs of California.

Federal Reserve Vice Chair Philip Jefferson is scheduled to speak on the U.S. economic outlook and monetary policy before the Lafayette College Economics Department Special Lecture at 7:30 pm ET.