U.S. stock futures traded mixed early Tuesday after the market’s retreat on Monday in response to President Donald Trump’s renewed push for tariffs. With the trade-deal uncertainty continuing and the broader market trading just off its peak, investors are likely to tread cautiously until clarity emerges.
As of 12:08 a.m. ET on Tuesday, the Nasdaq 100 futures and the Russell 2000 futures climbed over 0.10%, while the S&P 500 futures edged down marginally, and the Dow futures slid about 0.10%.
On Monday, stocks opened sharply lower as traders assessed the letters Trump sent to the heads of state of key trading partners regarding the higher tariff rate if they do not come into compliance by the extended deadline of Aug. 1.
The SPDR S&P 500 ETF (SPY) and the Invesco QQQ Trust (QQQ) ETF, exchange-traded funds (ETFs) that track the S&P 500 and the Nasdaq 100 Indexes, fell 0.75% each.
The SPDR Dow Jones Industrial Average ETF Trust ( DIA (BME:DIDA)) and iShares Russell 2000 ETF (IWM) moved down a steeper 0.91% and 1.5%, respectively.
Among the Main Street catalysts that could impact trading on Tuesday are the National Federation of Independent (LON:IOG) Business (NFIB) optimism index, due at 6 a.m. ET, and the Federal Reserve’s consumer credit report scheduled for 3 p.m. ET.
In his latest weekly commentary, WisdomTree Senior Economist Jeremy Siegel said he was closely watching a potential shift in market leadership
“July has opened strongly for smaller caps, but I believe the stage is set for a longer-lasting rotation,” the economist and strategist said.
He repeated his view that companies leveraging artificial intelligence (AI) technology for productivity gains are poised to outperform. “If users begin to invest in cost-saving technologies under the pressure of higher tariffs or wage costs, value could finally have its day,” he added.
The view aligned with a recent commentary from LPL Financial Chief Technical Strategist Adam Turnquist.
The strategist noted that technically, the S&P Small Cap 600 Index (SML) has cleared the neckline of a head-and-shoulders bottom formation after closing above 1,325 last week. He also noted that the breadth is moving in the right direction, with around half of SML constituents trading above their 200-day moving average (DMA). The percentage of constituents at four-week highs reached 43% last week, he added.
That said, Turnquist viewed that small caps have struggled to keep up with their large-cap peers despite the recent technical progress. LPL maintained a slight preference for large caps due to their AI exposure, more earnings power, strong balance sheets, and better relative strength trends, he added.
Crude oil futures pulled back in the Asian session after Monday’s nearly 3% rally despite OPEC+’s plan for a bigger-than-expected output hike. Gold futures were little changed around the $3,342-an-ounce level.
The 10-year U.S. Treasury note yield retreated overnight after rising 4.7 basis points to 4.3950% on Monday. The U.S. dollar slipped against most major counterparts, barring the Japanese yen.
