U.S. Stock Futures Decline as Trade Tensions Resurface and Investors Await Bank Earnings, Powell Speech

U.S. stock index futures moved lower on Tuesday, signaling a pause in the market’s recent rebound, as renewed concerns over the U.S.-China trade conflict and anticipation ahead of key bank earnings weighed on sentiment.

Futures Turn Lower After Monday’s Recovery

By 09:44 GMT, S&P 500 futures fell 0.8% (–55 points), Nasdaq futures dropped 1.1% (–263 points), and Dow futures were down 0.5% (–231 points). The move comes after Monday’s solid rally, when major indices clawed back much of last week’s losses following U.S. President Donald Trump’s attempt to soften his rhetoric on trade.

Trump’s earlier threat to impose 100% tariffs on Chinese imports in response to Beijing’s expanded rare earth export restrictions sent shockwaves through markets on Friday. His weekend statement that investors should “not worry about China” briefly restored confidence, but lingering unease over the standoff continues to dominate global sentiment.

U.S.-China Trade Dispute Remains a Key Risk

Although Treasury Secretary Scott Bessent reiterated that the long-awaited Trump-Xi meeting in South Korea remains scheduled for later this month, both countries have introduced new port fees on ocean shipping firms — a move seen as symbolic of rising friction.

Adding to concerns, China announced sanctions on five U.S.-linked subsidiaries of South Korea’s Hanwha Ocean, further escalating trade tensions and complicating diplomatic efforts.

Bank Earnings Season Kicks Off

Markets now turn to the start of third-quarter corporate earnings, with JPMorgan Chase, Goldman Sachs, Citigroup, and Wells Fargo reporting on Tuesday, followed by Bank of America and Morgan Stanley on Wednesday.

Analysts expect strong results overall, buoyed by resilient consumer spending, firm lending activity, and a rebound in deal-making amid easing regulations. However, commentary on the economic outlook will be closely watched — particularly after JPMorgan CEO Jamie Dimon warned last week of a potential market correction within the next two years due to geopolitical tensions and fiscal pressures.

Powell Speech in Focus

Later in the session, investors will monitor Federal Reserve Chair Jerome Powell’s remarks at the National Association for Business Economics (NABE) annual meeting. With official U.S. economic data delayed by the ongoing government shutdown, Powell’s tone could shape market expectations for further interest rate cuts this year.

Market Outlook

Traders remain cautious amid the combination of trade uncertainty, looming bank results, and Fed commentary. Analysts note that while the broader bull market remains intact, the lack of new macro data and the fragility of U.S.-China relations could lead to near-term volatility in equities.

Focus will also remain on global risk sentiment, with investors watching for any signs of progress in Washington-Beijing trade talks and the tone of Powell’s speech for clarity on the Fed’s next policy move.