Stock Futures Decline Amid Rising Trade Tensions as Investors Await Powell’s Testimony
Market Overview U.S. stock futures slipped on Tuesday as investors braced for Federal Reserve Chairman Jerome Powell’s testimony and growing concerns over global trade tensions.
Futures for the Dow Jones Industrial Average dropped 130 points, or 0.3%, while S&P 500 and Nasdaq 100 futures fell 0.4% and 0.7%, respectively.
Powell is set to address the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday, both at 10 a.m. ET. His testimony will begin with prepared remarks and comes at a time of heightened uncertainty in Washington.
Trade Tensions and Policy Uncertainty President Donald Trump has reaffirmed his stance on tariffs, recently signing new duties on all steel and aluminum imports. The European Union has warned it will retaliate with its own levies should the U.S. impose additional tariffs on its goods.
“Estimating the impact of current tariffs is already difficult, and predicting the fallout from potential future levies adds another layer of complexity,” said Ian Lyngen, head of U.S. rates strategy at BMO.
Powell is expected to be questioned on the implications of Trump’s trade policies and how they might influence the Federal Open Market Committee (FOMC)'s response. “The market will be looking for clarity on whether one-off price increases from tariffs will prompt any action from the Fed,” Lyngen added.
Although Trump has previously advocated for lower interest rates, Treasury Secretary Scott Bessent recently stated that the White House would not pressure the Fed to cut its benchmark rate. Instead, the administration aims to lower the 10-year Treasury yield through deregulation and spending cuts to control inflation.
Upcoming Economic Data Investors are also anticipating fresh inflation data this week, with the consumer price index (CPI) report due on Wednesday, followed by the producer price index (PPI) on Thursday.
Cleveland Fed’s Hammack: No Rate Cuts Amid Inflation Risks Cleveland Federal Reserve President Beth Hammack stated Tuesday that interest rates are unlikely to be reduced anytime soon due to persistent inflation risks.
Speaking at a forum in Kentucky, Hammack noted, “Upside risks to inflation remain, driven by tariffs and strong consumer spending.”
She emphasized the Fed’s ability to be patient given the economy’s strength, saying, “With a healthy labor market and continued economic momentum, we need broad-based evidence of inflation sustainably returning to 2% before adjusting policy.”
Although Hammack is a nonvoting member of the FOMC in 2025, she will participate in discussions and contribute economic projections before gaining a vote in 2026.
Stocks Making Pre-Market Moves Some stocks making notable moves ahead of Tuesday’s trading session include:
Coca-Cola (KO): Shares surged 3.2% after reporting better-than-expected fourth-quarter results. The company posted an adjusted 55 cents per share in earnings on $11.54 billion in revenue, surpassing analysts’ expectations of 52 cents per share and $10.68 billion in revenue.
Affirm (AFRM): The online lender rose 1.8% following an announcement of a partnership with FIS, expanding its buy-now-pay-later services to more banks.
Fluence Energy (FLNC): Shares plunged 38% after missing first-quarter earnings estimates. The company reported a loss of 32 cents per share on $186.8 million in revenue, falling short of analyst expectations of a 19-cent loss and $362.5 million in revenue.
Coca-Cola Rises on Strong Quarterly Earnings Coca-Cola’s stock jumped 3.3% after the company posted impressive fourth-quarter earnings. Growth was largely driven by higher pricing and strong global demand, a challenge for many consumer brands.
Quarterly Results:
Earnings per share: 55 cents (adjusted) vs. 52 cents expected
Revenue: $11.54 billion vs. $10.68 billion expected
Mizuho Upgrades First Solar on Strong Patent Position Mizuho analysts upgraded First Solar (FSLR) to outperform from neutral, citing a stronger-than-expected sales outlook post-2026. Analyst Maheep Mandloi also raised the stock’s price target from $218 to $259.
Despite underperforming in early 2025, First Solar’s prospects remain positive. “Concerns about the expiration of the 45X manufacturing tax credits under a Republican administration have weighed on the stock. However, tariffs will likely offset these risks, improving First Solar’s pricing power in 2027,” Mandloi noted.
Market Outlook: Continued Choppiness Expected Fundstrat’s Mark Newton sees more volatility ahead for U.S. stocks. “Despite recent tariff-related volatility, the broader uptrend remains intact,” Newton wrote in a note.
Although technology stocks have shown resilience, other key indices—such as the Equal-weighted S&P 500, Dow Transportation Average, and Russell 2000—remain well below their December highs. “Sentiment on tariffs has turned notably bearish in recent weeks, which could paradoxically be a positive sign for equities and bonds,” Newton added.
Stocks Moving After Hours Several companies made headlines in extended trading:
Lattice Semiconductor (LSCC): Shares surged 12% after surpassing fourth-quarter revenue expectations. The company reported $117.4 million in revenue, slightly above analysts’ forecast of $117.1 million.
Vertex Pharmaceuticals (VRTX): The biotech firm dropped 1% after posting mixed results. Adjusted earnings came in at $3.98 per share, below the expected $4.03, while revenue exceeded expectations at $2.91 billion vs. the anticipated $2.78 billion.
Astera Labs (ALAB): Shares gained nearly 2% after the semiconductor firm beat earnings and revenue estimates. The company reported 37 cents per share in adjusted earnings on $141 million in revenue, surpassing estimates of 26 cents per share and $128 million.
Stock Futures Open Flat U.S. stock futures remained relatively unchanged on Monday night:
Dow Jones Industrial Average futures fell 26 points (0.06%).
S&P 500 and Nasdaq 100 futures dipped about 0.1% each.
As investors await Powell’s testimony and monitor trade tensions, market volatility is expected to persist in the near term.
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