U.S. stock index futures hovered near unchanged levels early Tuesday, suggesting a cautious start to the trading session after Monday’s steep market drop. Investors appear hesitant to make bold moves amid persistent ambiguity around President Donald Trump’s evolving trade stance.
On Monday, Trump formalized an extension of the temporary suspension on reciprocal tariffs affecting several U.S. trading partners. The executive order pushed the deadline from July 10 to August 1, citing “additional information and recommendations from various senior officials.”
However, Trump added that the new deadline is “not 100 percent firm,” explaining, “If they call up and they say something a different way, we’re going to be open to that.” The ambiguity left markets on edge.
The order followed a series of letters Trump posted to his Truth Social account, warning of impending tariff hikes on at least 14 countries. The letters detailed tariffs ranging from 25% to as high as 40%, with potential penalties of up to 70% for countries viewed as aligning with “anti-American policies.”
With no major U.S. economic reports scheduled for release today, investors are instead looking ahead to the Federal Reserve’s June meeting minutes, due out Wednesday. These minutes could offer critical clues about future interest rate policy ahead of the central bank’s July 29–30 meeting.
Currently, the CME FedWatch Tool suggests a 95.3% probability that the Fed will keep interest rates unchanged later this month.
On Monday, U.S. equities experienced a broad selloff, reversing gains from the prior week’s rally, which had pushed the S&P 500 and Nasdaq to record highs. Stocks stumbled out of the gate and lost further ground throughout the day.
Though the major indices recovered slightly from session lows, they still ended the day firmly in the red. The Dow Jones Industrial Average fell 422.17 points, or 0.9%, closing at 44,406.36. The Nasdaq Composite declined 188.59 points (0.9%) to 20,412.52, while the S&P 500 dropped 49.37 points, or 0.8%, to finish at 6,229.98.
Analysts attributed the pullback to profit-taking, compounded by fresh trade jitters sparked by Trump’s tariff letters. Imports from Japan, South Korea, Malaysia, and Kazakhstan are set to face 25% tariffs, while South African goods will see a 30% levy. Imports from Laos and Myanmar will be subject to 40% duties, according to the documents shared by Trump.
“What’s troubling investors is Trump potentially moving the goalposts yet again,” said Dan Coatsworth, investment analyst at AJ Bell. “He has form in constantly coming up with new terms and conditions and has now threatened an extra 10% tariff on countries who align themselves with ‘anti-American policies’ of BRICS nations.”
“He also suggests some tariffs could reach up to 70%, greater than the previous maximum amount on the Liberation Day menu,” he added. “Investors would much prefer one set of rules and for the Trump administration to stick to them.”
Market weakness was most pronounced in the tech and energy sectors. The NYSE Arca Computer Hardware Index sank 2.2%, retreating from a four-month high. Oil service stocks also underperformed, with the Philadelphia Oil Service Index slipping 2.0%.
Airlines, semiconductors, and steel stocks posted similar declines, while gold-related shares stood out as rare gainers, benefiting from renewed demand for safe-haven assets.
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