U.S. stock index futures pointed modestly higher on Tuesday, suggesting markets may attempt to recover after the sharp losses recorded in the previous trading session.
Investors may be tempted to step back into equities at lower valuations following Monday’s sell-off, which pushed the Dow to its weakest closing level in a month.
Still, any recovery could remain tentative as ongoing uncertainty surrounding trade tariffs continues to weigh on market sentiment.
Market participants may also avoid making aggressive bets ahead of quarterly earnings from artificial intelligence heavyweight Nvidia (NASDAQ:NVDA), due after Wednesday’s closing bell.
“Investors have plenty to worry about, and Nvidia’s results on Wednesday have the potential to make or break the market depending on what it says about AI,” said Dan Coatsworth, head of markets at AJ Bell.
He added, “The market has this year shown widespread concerns about all things linked to AI, from excessive spending to business models being disrupted, so Nvidia needs to retain its uber-bullish stance if it wants to avoid stirring the pot of worry for investors.”
After posting solid gains last week, equities retreated sharply on Monday, with all three major U.S. benchmarks ending the session significantly lower and the Dow recording its lowest close in roughly a month.
Although stocks rebounded somewhat from intraday lows, losses remained substantial. The Dow dropped 821.91 points, or 1.7%, to 48,804.06, the Nasdaq declined 258.80 points, or 1.1%, to 22,627.27, and the S&P 500 fell 71.76 points, or 1.0%, to 6,837.75.
The downturn followed renewed trade uncertainty after the U.S. Supreme Court last Friday invalidated most of President Donald Trump’s sweeping global tariff measures.
In a Truth Social post on Saturday, Trump said he would raise worldwide tariffs to the “fully allowed” and “legally tested” 15 percent level, up from the 10 percent rate announced shortly after the ruling.
“During the next short number of months, the Trump Administration will determine and issue the new and legally permissible Tariffs, which will continue our extraordinarily successful process of Making America Great Again – GREATER THAN EVER BEFORE!!!” Trump said.
While a White House fact sheet acknowledged the president may impose tariffs for only 150 days without congressional approval, Trump later asserted that he would not need to seek authorization from Congress.
He also warned that any country attempting to “play games” would face a “much higher Tariff, and worse, than that which they just recently agreed to.”
Meanwhile, the European Commission called for “full clarity” regarding Washington’s next steps following the court decision.
In a statement, the Commission said the current situation was “not conducive” to delivering “fair, balanced, and mutually beneficial” transatlantic trade and investment relations outlined in the EU-U.S. Joint Statement of August 2025.
“A deal is a deal,” the European Commission said. “As the United States’ largest trading partner, the EU expects the U.S. to honour its commitments set out in the Joint Statement – just as the EU stands by its commitments.”
Market sentiment was further pressured by a steep decline in IBM Corp. (NYSE:IBM), whose shares plunged 13.2%.
The technology company came under pressure after Anthropic’s Claude introduced COBOL capabilities, targeting a programming language widely used in enterprise data processing — a key area of IBM’s business.
Financial stocks were among the worst performers, with the KBW Bank Index tumbling 4.4% and the NYSE Arca Securities Broker/Dealer Index falling 3.4%.
Software companies also faced heavy selling pressure, reflected by a 3.9% drop in the Dow Jones U.S. Software Index.
Airline, computer hardware, and networking shares also declined notably, while gold-related stocks moved higher, supported by a strong rise in the price of the precious metal.
