U.S. Stocks May See Early Weakness, Powell Testimony In Focus

The major U.S. index futures are currently pointing to a lower open on Tuesday, with stocks likely to move back to the downside after turning in a strong performance in the previous session.

Lingering concerns about a global trade war may weigh on Wall Street after President Donald Trump officially announced tariffs on U.S. steel and aluminum imports.

A statement from the White House said Trump is reinstating a 25 percent tariff on steel imports and increasing tariffs on aluminum imports to 25 percent.

Early trading is also likely to be impacted by reaction to congressional testimony by Federal Reserve Chair Jerome Powell.

Powell is due to appear before the Senate Banking Committee this morning, with his remarks potentially impacting the outlook for interest rates.

Overall trading activity may be somewhat subdued, however, as traders look ahead to the release of closely watched inflation reports in the coming days.

After moving mostly higher early in the session, stocks continue to turn in a strong performance throughout the trading day on Monday. With the upward move, the major averages partly offset the steep losses posted last Friday.

The major averages moved roughly sideways in afternoon trading, hovering in positive territory. The Nasdaq jumped 190.87 points or 1.0 percent to 19,714.27, the S&P 500 climbed 40.45 points or 0.7 percent to 6,066.44 and the Dow rose 167.01 points or 0.4 percent to 44,470.41.

The rebound on Wall Street may partly have reflected bargain hunting, as traders picked up stocks at somewhat reduced levels following the sharp pullback seen last Friday.

While Friday’s slump partly reflected new tariff threats from President Donald Trump, traders largely shrugged off his latest threat to impose a 25 percent tariff on all steel and aluminum imports into the U.S.

The latest tariff threat comes after Trump said last Friday he plans to announce reciprocal tariffs on many countries this week, with the U.S. imposing tariffs on imports equal to the rates imposed on American exports.

“Perhaps investors have decided not to react every time Donald Trump yanks the steering wheel in another direction for fear of getting whiplash, or perhaps they’ve simply remembered how to operate in a world where volatility is baked in,” said AJ Bell head of financial analysis Danni Hewson.

Meanwhile, amid a light day on the U.S. economic front, traders were also looking ahead to the release of several key reports in the coming days.

Reports on consumer and producer inflation are likely to be in focus, while reports on retail sales and industrial production may also attract attention.

Computer hardware stocks moved sharply higher over the course of the session, driving the NYSE Arca Computer Hardware Index up by 4.6 percent to its best closing level in almost seven months.

Super Micro Computer (SMCI) helped lead the sector higher, soaring by 17.6 percent ahead of fiscal second quarter business update after the close of trading on Tuesday.

Steel stocks also saw significant strength in reaction to Trump’s tariff threat, resulting in a 3.3 percent surge by the NYSE Arca Steel Index.

Gold stocks also saw substantial strength amid a sharp increase by the price of the precious metal, with the NYSE Arca Gold Bugs Index surging by 2.8 percent.

Oil producer, telecom and natural gas stocks also saw considerable strength on the day, while financial and biotechnology stocks bucked the uptrend.

Commodity, Currency Markets

Crude oil futures are jumping $1.18 to $73.50 a barrel after surging $1.32 to $72.32 a barrel on Monday. Meanwhile, after soaring $46.80 to $2,934.40 an ounce in the previous session, gold futures are slumping $20.60 to $2,913.80 an ounce.

On the currency front, the U.S. dollar is trading at 152.36 yen compared to the 151.99 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0320 compared to yesterday’s $1.0306.

Asia

Asian stocks ended mixed in thin trading on Tuesday, with Japanese markets closed for a public holiday.

Chinese and Hong Kong stocks underperformed amid U.S. trade policy shifts and deflation concerns as retaliatory Chinese duties on U.S. energy and other goods came into effect on Monday.

Gold shot to a record high and the dollar was firm as investors waited to hear from Federal Reserve Chair Jerome Powell on tariffs and inflation.

Oil extended sharp overnight gains on fears of more supply disruptions following U.S. sanctions on networks shipping Iranian oil to China.

In addition, Russian oil production fell short of its OPEC+ quota in January, easing concerns of an oversupply.

China’s Shanghai Composite Index edged down 0.1 percent to 3,318.06 as steelmakers declined on concerns over the possible impact of tariffs on steel exports this year. Hong Kong’s Hang Seng Index slumped 1.1 percent to 21,294.86.

Seoul stocks rose notably, with the Kospi climbing 0.7 percent to 2,539.05 despite Trump’s announcement of new tariff plans.

Leading bio firm Samsung Biologics surged 3.9 percent, while electric vehicle battery maker LG Energy Solution lost 1 percent.

Australian markets finished marginally higher as U.S. President Donald Trump imposed 25 percent tariffs on all U.S. imports of steel and aluminum but promised to give Australia’s case “great consideration.”

Gold miners such as Northern Star Resources and St Barbara surged 4-6 percent. Biopharmaceutical company CSL plunged 5 percent after announcing weak half-year profits.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index rose 0.3 percent to 12,917.45 despite disappointing earnings from Vulcan Steel.

Europe

European stocks are flat to modestly higher on Tuesday, with U.S. President Donald Trump’s tariff announcement on metals and upcoming semiannual monetary policy testimony from Federal Reserve Chair Jerome Powell in focus.

In economic news, France’s unemployment rate dropped marginally in the fourth quarter, the statistical office INSEE reported.

The jobless rate unexpectedly fell to 7.3 percent from 7.4 percent in the third quarter, while analysts had expected the rate to rise to 7.5 percent. The number of unemployed decreased 63,000 sequentially to 2.3 million.

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

British oil major BP Plc has edged down slightly after reporting a steep drop in profits for the fiscal quarter of last year.

Sports betting firm Entain has slumped as Chief Executive Officer Gavin Isaacs stepped down with immediate effect after less than six months in the role.

Novartis traded modestly higher. The Swiss pharmaceutical giant has agreed to acquire Anthos Therapeutics for up to $3.1 billion.

Luxury group Kering has jumped in Paris after posting better-than-expected sales in the fourth quarter.

Austrian sensor maker Ams-OSRAM has soared. The company forecast recovery in the second half of 2025 after posting disappointing Q1 sales amid muted demand for its automotive semiconductors.

Italian lender UniCredit has tumbled despite posting better-than-expected 2024 earnings.

U.S. Economic News

Federal Reserve Chair Jerome Powell is scheduled to deliver his Semiannual Monetary Policy Report before the Senate Banking Committee beginning at 10 am ET.

At 1 pm ET, the Treasury Department is due to announce the results of this month’s auction of $58 billion worth of three-year notes.

Federal Reserve Board Governor Michelle Bowman is scheduled to speak on “Bank Regulation” before the 2025 Iowa Bankers Association Bank Management and Policy Conference at 3:30 pm ET.

Also at 3:30 pm ET, New York Federal Reserve President John Williams is due to deliver keynote remarks before the Pace University Economics Society.