Dow, S&P 500 Futures Decline As Wall Street Shifts Focus To Trump’s Fresh Tariff Letters, Earnings Season: Strategist Says Risk Appetite ‘Remains On Table’

U.S. stock futures traded moderately lower early Monday, reflecting Wall Street’s anxiety about the impending second-quarter reporting season and President Donald Trump’s latest tariff moves. 

On Friday, Trump announced a 30% rate each for the European Union and Mexico. It has emerged that the 27-nation EU bloc, while expressing willingness to work toward a deal, is eyeing coordination with other countries hit by tariffs. 

The consumer price inflation (CPI) report due on Tuesday may also serve to keep sentiment subdued, given its implication for interest rates.

As of 12:13 a.m. ET on Monday,  the Dow, S&P 500, and Nasdaq 100 futures were all down about 0.40%, while the Russell 2000 futures declined a steeper 0.65%.

Stocks closed the week ended July 11 lower despite the S&P 500 Index and the Nasdaq Composite hitting new highs on Thursday before easing off those levels. Trump’s tariff letters to a slew of countries remained the undercurrent, with traders using the trade uncertainty to take some profit off the table. The S&P 500, thereby, snapped a two-week winning streak.

The SPDR S&P 500 ETF (SPY) and the Invesco QQQ Trust (QQQ), exchange-traded funds (ETFs) that track the S&P 500 Index and the Nasdaq 100 Index, fell 0.4% each for the week. The SPDR Dow Jones Industrial Average ETF Trust (DIA) declined 1% and the iShares Russell 2000 ETF (IWM) lost a more modest 0.6%.

Although Monday’s calendar of Main Street events is empty, the unfolding week has its fair share of catalysts that can move the market.

On tap for the week are the CPI report and its wholesale counterpart, the retail sales report, the weekly jobless claims data, the results of two regional manufacturing surveys, preliminary consumer sentiment data, and a deluge of speeches by Federal Reserve officials before the “blackout period” kicks in. 

Big Bank earnings begin to roll in this week, with Citi, JPMorgan, Wells Fargo, Bank of America, Goldman Sachs, Morgan Stanley, Bank of New York Mellon all due to report this week, along with mid-tier financial services company and regional banks. 

United Airlines, Johnson & Johnson, GE Aerospace, PepsiCo, Netflix, Travelers Companies, 3M, American Express and Ericsson are also scheduled to release their quarterly financial scorecards.

“Risk appetite remains on table,” said LPL Financial Chief Technical Strategist Adam Turnquist in a note released Friday, citing the ratio between the S&P 500 Equal Weight Consumer Discretionary (SPXEWCD) and S&P 500 Equal Weight Consumer Staples (SPXEWCS).

The strategist said that for the majority of the bull market, consumer discretionary stocks outperformed staples, creating a relatively consistent uptrend in the ratio chart until earlier this year, when these stocks broke down from their February highs amid risk aversion.

“However, the V-shaped recovery powered by cyclical leadership since the April 8 low has repaired the technical damage, leaving the ratio chart back near year-to-date highs,” he added.

Fund manager Louis Navellier said he felt good about “fundamentally superior stocks.” “Due to recent tax cuts, the surging tax revenue from tariffs, the onshoring in America, and the fact that the Fed will be finally joining the party and help provide a ‘turbo boost,’ the U.S. economy should accelerate to 5% annual GDP growth in the upcoming quarters,” he added.

Crude oil futures are firmer in the new week, trading atop the $68-a-barrel level, and gold futures traded modestly higher above $3,370.

The 10-year Treasury note edged down after settling the previous week above the 4.4% mark for the first time in a month amid the tariff uncertainties. 

The U.S. dollar edged up against most major currencies, except fellow safe havens, the yen and the Swiss franc.

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