(Reuters) -Futures tracking S&P 500 and Nasdaq edged up on Tuesday, as investors looked past U.S. President Donald Trump’s latest tariff offensive, and hoped that further negotiations with key trading partners would avert a full-blown trade war.
At 5:20 a.m. ET, Dow E-minis were down 31 points, or 0.07%, U.S. S&P 500 E-minis were up 7.5 points, or 0.12%, and Nasdaq 100 E-minis were up 61 points, or 0.27%.
The Dow fell as much as 1.4% on Monday, while the S&P 500 and the Nasdaq dropped 1% each after Trump sent letters to 14 nations — including Japan and South Korea — threatening steep new tariffs on U.S. imports, while also postponing their implementation to Aug. 1.
“Trump has re-ignited his threat… but again, he’s given another concession and pushed back the period. That is conceding to the fact that he wants to achieve these trade deals. It’s in his best interest as well as everyone else’s,” said Daniela Hathorn, senior market analyst at Capital.com.
Trump in April capped all of the so-called reciprocal tariffs with trading partners at 10% until July 9 to allow for negotiations. In the same month, the Nasdaq was knocked into bear market territory, while the Dow and S&P 500 had confirmed a correction.
But Wall Street has since staged a comeback. Last week, the Nasdaq and the S&P 500 soared to record highs, fueled by a resilient labor market that alleviated recession fears.
The U.S. has so far reached trade agreements with only Britain and Vietnam. In June, Washington and Beijing agreed on a framework covering tariff rates, restoring a fragile truce in their trade war.
In mega-cap stocks, shares of Tesla rebounded 1.3% in premarket trading after the stock recorded its steepest single-day fall in nearly a month on Monday.
Goldman Sachs has raised its three-, six- and 12-month return forecasts for the S&P 500, citing expectations of U.S. interest rate cuts and continued fundamental strength of major large-cap stocks as key drivers of its positive outlook.
Traders have now all but ruled out a July rate cut from the Federal Reserve, putting the odds of a September cut at around 60%, according to the CME FedWatch tool.
It’s a quiet week on the economic front, with the only notable data expected on Thursday on initial jobless claims. The Fed calendar is equally sparse, featuring just two district presidents slated to speak.
(Reporting by Pranav Kashyap in Bengaluru; Editing by Shinjini Ganguli)
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