U.S. stock futures edged down Tuesday following a strong rally on Monday when global markets reached new intraday highs. Investors are now weighing developments in U.S.-Canada trade negotiations and a softer dollar, while preparing for important upcoming economic data later this week.
By early Tuesday morning (07:32 GMT), Dow futures were down 30 points (-0.1%), S&P 500 futures slipped 11 points (-0.2%), and Nasdaq 100 futures lost 56 points (-0.3%). Monday’s gains had been fueled by optimism around a potential restart of trade talks between the U.S. and Canada, although concerns linger over a massive tax and spending bill currently under debate in the Senate that could add significantly to the national debt, which already stands at $36.2 trillion.
Despite some headline-driven fluctuations during the day, analysts at Vital Knowledge noted, “there is limited immediate anxiety regarding either the reconciliation bill or tariff developments.”
Trump Intensifies Pressure on Fed Chair Powell
President Donald Trump ratcheted up his criticism of Federal Reserve Chair Jerome Powell on Monday, sending him a strongly worded handwritten letter urging a swift and substantial cut in interest rates. Along with the letter, Trump included a chart comparing interest rates set by central banks worldwide, arguing the U.S. should aim for borrowing costs around 1% or lower.
Trump’s message was clear: “As usual, too late,” he wrote, lamenting that the country is losing “hundreds of billions” due to the Fed’s current rate stance. This comes after the Fed decided last month to maintain rates between 4.25% and 4.5%, with Powell adopting a cautious wait-and-see approach amid uncertainties linked to Trump’s aggressive tariff policies.
Frustrated with what he views as a slow response compared to other central banks, Trump has launched repeated verbal attacks on Powell and is reportedly considering appointing a potential successor before the end of the year — a move that could undermine Powell’s authority, analysts say.
Powell to Speak at ECB Forum Amid Market Uncertainty
Jerome Powell will take center stage again Tuesday at a high-profile panel discussion during the European Central Bank’s annual forum in Sintra, Portugal. Alongside Powell will be ECB President Christine Lagarde and central bank leaders from Japan, the U.K., and South Korea.
The discussion is expected to touch on the evolving role of the U.S. dollar as the dominant global reserve currency, especially given its sharp decline this year—the worst start since the 1970s—largely driven by Trump’s protectionist trade stance.
Uncertainty will likely dominate the forum, as Lagarde noted in her opening remarks Monday, emphasizing that unclear direction on U.S. tariffs and the President’s fiscal plans remain major factors affecting the global economy.
U.S. Focuses on Narrow Trade Deals Ahead of Tariff Deadline
According to the Financial Times, the U.S. administration is shifting its trade strategy toward narrower, more targeted agreements to secure quick progress before a looming July 9 deadline, when punitive reciprocal tariffs could be reinstated.
Rather than pursuing the original goal of 90 broad trade agreements during the 90-day tariff pause that began April 2, officials are now seeking “agreements in principle” on limited issues with select countries. This approach aims to avoid tariffs as high as 50%, although a baseline tariff of 10% would remain while broader negotiations continue.
Trade talks remain complex, with the administration still weighing the possibility of imposing tariffs on key sectors even as it pursues these phased deals.
Oil Markets Remain Volatile Ahead of OPEC+ Meeting
Crude oil prices showed choppy trading, dropping after hitting a three-week low amid easing supply concerns and expectations of increased output from OPEC+.
At 03:38 ET, Brent crude futures were down 0.4% to $66.47 a barrel, having earlier hit their lowest point since June 11, just before the Israel-Iran conflict began. U.S. West Texas Intermediate futures fell 0.5% to $64.81 a barrel.
The OPEC+ group is scheduled to meet on July 6. Reuters reported last week that the alliance plans to boost production by 411,000 barrels per day in August, following similar increases in May, June, and July. This would bring total supply increases for the year to 1.78 million barrels per day, though still less than the volume of cuts implemented over the past two years.
