US Market Outlook Brightens as Trump Signals Tariff Relief and Big Earnings Roll In

Auto tariff easing, corporate results and key economic data drive investor sentiment

Stock Futures Edge Higher Amid Market Jitters

US stock futures rose slightly on Tuesday morning, hinting at cautious optimism after a turbulent start to the week. Traders are now eyeing a raft of corporate earnings reports and key economic data for further direction.

As of 07:21 GMT, Dow futures were up 0.1%, S&P 500 futures rose 0.2%, and Nasdaq 100 futures also added 0.2%. On Monday, the Dow Jones and S&P 500 posted modest gains, while the Nasdaq fell 0.1% following weakness in Nvidia shares, amid reports that Huawei is developing a rival AI chip.

Trump to Ease Auto Tariffs

In a significant development, President Donald Trump is expected to relax tariffs on car imports and parts, according to the Wall Street Journal. The move is aimed at supporting domestic auto manufacturing and is expected to be announced at a rally in Detroit.

Key takeaways:

• Tariffs on cars and auto parts will be adjusted to prevent double penalties.
• Car makers may receive reimbursements for tariffs already paid.
• The decision follows commitments from automakers to invest in US manufacturing.

Industry reactions were swift: General Motors called talks with Trump "productive", while Ford expressed appreciation for the change. Analysts noted that while tariffs may remain elevated, this move represents a step towards tariff relief.

Major Earnings on the Radar

This week, over 180 S&P 500 firms are set to report earnings. Tuesday's focus includes:

• Coca-Cola
• Pfizer
• Spotify
• Visa (after market close)
• Starbucks
• Mondelez (maker of Oreo biscuits)

Investors are watching closely, as many firms have issued cautious forecasts due to the uncertain trade environment. Despite the headwinds, S&P 500 earnings are expected to show 10.9% year-on-year growth, according to data from LSEG.

Economic Data in Focus

Markets are also gearing up for a wave of economic indicators that could shape the Federal Reserve’s monetary policy and provide early signals of how Trump's trade policies are impacting the real economy.

Key data includes:

• JOLTS (Job Openings and Labour Turnover Survey): A decline could indicate rising unemployment concerns.
• Consumer Confidence Survey: Offers insight into household sentiment.
• Q1 US GDP (due Wednesday): Forecast to slow to 0.4% from 2.4% in Q4.

Analysts say that a sharp drop in job openings may pressure the dollar and could prompt the Fed to consider earlier and deeper rate cuts, particularly if trade tensions escalate again.

Gold and Oil React to Tariff News

Gold prices dipped slightly following the news of potential tariff relaxation, as investors moved away from safe-haven assets. Meanwhile, oil prices declined amid concerns over global growth and oversupply, both tied to the ongoing trade conflict.

Conclusion

Investor sentiment appears cautiously optimistic, buoyed by President Trump’s reported willingness to ease auto tariffs and a busy earnings calendar featuring some of the world’s biggest companies. While near-term relief is evident, longer-term concerns remain around trade policy volatility and its potential to disrupt investment and economic stability.

As the week progresses, attention will shift to labour market data, consumer sentiment, and GDP figures, all of which could play a pivotal role in shaping central bank actions and future market direction.

Sources: (Investing.com, Reuters)