US Stocks Likely To Open Lower: Equities Face 'High Bar' Amid Tariff-Fueled Volatility In The Second Half Of 2025, Says Analyst
U.S. stock futures were trading lower on Tuesday after a mixed close on Monday. Futures of major benchmark indices were largely flat in premarket.
Trade discussions between the U.S. and China delegations are set to continue on Tuesday in London. –
Following these initial talks on Monday, U.S. President Donald Trump addressed reporters from the White House, stating: “We are doing well with China. China’s not easy. I’m only getting good reports.”
Meanwhile, officials from the Trump administration expect China to lift restrictions on exports of rare earth alloys, minerals, and magnets, as trade negotiations between Washington and Beijing continue
The 10-year Treasury bond yielded 4.45% and the two-year bond was at 3.98%. The CME Group's FedWatch tool‘s projections show markets pricing a 99.9% likelihood of the Federal Reserve keeping the current interest rates unchanged in its June meeting.
| Futures | Change (+/-) |
| Dow Jones | -0.12% |
| S&P 500 | -0.03% |
| Nasdaq 100 | -0.04% |
| Russell 2000 | 0.10% |
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, were mixed in premarket on Tuesday. The SPY was down 0.0017% at $599.67, while the QQQ advanced 0.026% to $530.84, according to Benzinga Pro data.
Cues From Last Session:
Most sectors on the S&P 500 closed on a negative note Monday, with utilities, financials, and consumer staples stocks recording the biggest losses.
However, consumer discretionary and materials stocks bucked the overall market trend, closing the session higher.
Meanwhile, U.S. stocks settled mixed, though the Nasdaq Composite gained more than 50 points during the session as trade talks between U.S. and Chinese officials stoked investor optimism.
Shares of Qualcomm Inc. (NASDAQ:QCOM) gained more than 4% after the company announced its agreement to acquire Alphawave for $2.4 billion.
Children’s Place Inc. (NASDAQ:PLCE) shares dipped 32% as the company posted weaker-than-expected first-quarter results.
On the economic data front, U.S. wholesale inventories rose 0.2% month-over-month to $908.7 billion for April. U.S. consumer inflation expectations for the year ahead eased to 3.2% in May compared to 3.6% in the previous month.
The Dow Jones index ended 1 point or 0.002% lower at 42,761.76, whereas the S&P 500 index rose 0.092% to 6,005.88. Nasdaq Composite advanced 0.31% to 19,591.24, and the small-cap gauge, Russell 2000, gained 0.57% to end at 2,144.45.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | 0.31% | 19,591.24 |
| S&P 500 | 0.092% | 6,005.88 |
| Dow Jones | -0.002% | 42,761.76 |
| Russell 2000 | 0.57% | 2,144.45 |
Insights From Analysts:
The U.S. economy and stock market face a “confluence of challenges” in the second half of the year, noted Charles Schwab & Co. Inc. in its mid-year outlook.
“Tariff-induced inflation, fiscal imbalances, and signs of labor market cooling contribute to an environment of heightened uncertainty and instability,” stated the note.
However, with stocks nearing all-time highs, “the bar is relatively high for the market in the second half of the year.”
The note also explained that there were “possibilities” for things to right with “tariff rates edging lower, the labor market stabilizing, and inflation remaining under control,” however, the firm had “low conviction” in understanding and predicting where the day-to-day news flow could head.
“For now, investor sentiment and positive earnings growth are supports, whereas stretched valuations and growth-negative tariff policy are hindrances,” it added.
The note also highlighted that “Investors should continue to embrace diversification across and within asset classes, especially given the dominance (this year) of markets outside the United States.”
Meanwhile, senior economist Jeremy Siegel said in his WisdomTree note that the investor sentiment was benefiting from signals of “progress or at least a pause” in U.S.-China trade tensions.
“I continue to believe the market can digest tariffs of 10% across the board and 30% for China with limited sector-specific increases like aluminum at 50%,” he stated.
Siegel added that “Looking ahead, the S&P 500 all-time highs are likely in the absence of major trade shocks. Risks remain, but the economy continues to show resilience.”
See Also: How to Trade Futures
Upcoming Economic Data
Here’s what investors will keep an eye on Tuesday:
- May’s NFIB optimism index data will be out by 6:00 a.m. ET.
Stocks In Focus:
- Core & Main Inc. (NYSE:CNM) fell 0.32% in premarket on Tuesday as analysts expect it to report quarterly earnings of 53 cents per share on revenue of $1.85 billion, before the opening bell.
- J M Smucker Co. (NYSE:SJM) was 0.14% lower ahead of its earnings, which are supposed to be released before the opening bell. Analysts expect earnings of $2.24 per share on revenue of $2.18 billion.
- United Natural Foods Inc. (NYSE:UNFI) rose 2.54% as analysts expect it to report quarterly earnings of 21 cents per share on revenue of $7.78 billion, before the opening bell.
- Designer Brands Inc. (NYSE:DBI) was up 2.41% ahead of its earnings, which are supposed to be released before the opening bell. Analysts expect a quarterly loss of 6 cents per share on revenue of $732.82 million.
- Calavo Growers Inc. (NASDAQ:CVGW) plunged 13.48% after posting downbeat results for its second quarter. The company reported quarterly earnings of 40 cents per share, which missed the analyst consensus estimate of 53 cents per share.
- Casey’s General Stores Inc. (NASDAQ:CASY) jumped 10.41% after posting better-than-expected earnings for its fourth quarter on Monday. The company reported quarterly earnings of $2.63 per share, which beat the analyst consensus estimate of $2.01 per share.
- Marin Software Inc. (NASDAQ:MRIN) surged 64.71% after it entered into a non-binding letter of intent with a private equity firm to explore a potential transaction.
- Klotho Neurosciences Inc. (NASDAQ:KLTO) zoomed 52.20% after announcing promising new study findings. Its licensed therapy showed potential to reduce age-related degeneration and significantly increase healthy lifespan.
- Venus Concept Inc. (NASDAQ:VERO) advanced 23.92% after closing its registered direct offering, raising $1.15 million through the sale of 434,720 shares at $2.65 per share.
- Baiya International Group Inc. (NASDAQ:BIYA) dropped 35.77% after announcing a partial waiver of IPO lock-up last week. The waiver allows the sale of 2,950,000 shares.
Commodities, Gold, And Global Equity Markets:
Crude oil futures were trading higher in the early New York session by 0.21% to hover around $65.43 per barrel.
Gold Spot US Dollar rose 0.09% to hover around $3,328.82 per ounce. Its last record high stood at $3,500.33 per ounce. The U.S. Dollar Index spot was higher by 0.24% at the 99.1790 level.
Asian markets were mixed on Tuesday as China’s CSI 300 and Hong Kong's Hang Seng indices fell. Australia's ASX 200, Japan's Nikkei 225, India's S&P BSE Sensex, and South Korea's Kospi indices rose. European markets were also mixed in early trade.
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