Major Indexes Under Pressure as Trade Tensions Escalate
U.S. stock futures pointed lower Monday morning as investors reacted to President Donald Trump’s weekend announcement of new tariffs targeting the European Union and Mexico. As of early premarket trading, Dow futures fell 0.5%, S&P 500 futures declined 0.4%, and Nasdaq 100 futures dropped 0.5%, setting the stage for a potentially turbulent start to the trading week.
The market pressure follows Trump’s declaration that the U.S. will impose a 30% tariff on goods from the European Union and Mexico beginning August 1, further intensifying global trade friction. This announcement comes just days after a similar move targeting Canadian goods, which contributed to market declines at the end of last week.
European markets also felt the impact of the tariff threats, with Germany’s DAX falling 0.75%, France’s CAC 40 down 0.51%, and Italy’s FTSE MIB declining 0.31%. The UK’s FTSE 100 was a rare bright spot, gaining 0.39% as it remains somewhat insulated from U.S.-EU trade disputes.
Treasury yields on the 10-year note held steady at around 4.4%, while oil and gold futures moved higher as investors sought safe-haven assets amid the uncertainty.
Premarket Movers: Crypto Stocks Surge, Healthcare Names Tumble
Several stocks are making significant moves in premarket trading. Among the notable gainers, Tesla (TSLA) shares rose more than 1% after CEO Elon Musk announced on his X social media platform that he doesn’t support merging the electric vehicle company with xAI, the maker of the Grok chatbot. Musk also indicated there would be a shareholder vote on whether Tesla would be allowed to invest in xAI.
In the cryptocurrency space, BIT Mining Limited (BTCM) surged 30.56% in premarket trading, likely benefiting from bitcoin hitting a record high over the weekend. Other crypto-related stocks showing strong premarket gains include Monogram Technologies (MGRM), up 72.04%.
On the downside, Everbright Digital Holding Limited (EDHL) plummeted 68.84% in premarket trading, while MiNK Therapeutics (INKT) fell 32.21%. Future FinTech Group (FTFT) declined 23.60%, and Autozi Internet Technology (AZI) dropped 22.59%.
Big Bank Earnings Week Ahead
This week marks the beginning of the second-quarter earnings season, with major financial institutions leading the way. JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC) are all scheduled to report their quarterly results before the market opens on Tuesday, providing investors with crucial insights into the health of the banking sector and broader economy.
Morgan Stanley analyst Betsy Graseck expects “robust” equities trading and strong investment banking activity to drive revenue growth for the large-cap banks. Global M&A volume was up 30% year over year as of June 30, a significant improvement from earlier in the year. North America equity market volume has also shown strong growth, up 49% as of the end of June.
Other financial institutions reporting Tuesday include BlackRock (BLK), BNY Mellon (BK), and State Street (STT), along with retailer Albertsons (ACI).
Key Earnings Throughout the Week
The earnings calendar remains packed throughout the week, with several high-profile companies set to report:
On Monday, Bank OZK (OZK), Interactive Brokers (IBKR), and Western Alliance Bancorp (WAL) will report after the market close.
Wednesday will see Netflix (NFLX) in the spotlight, with analysts expecting second-quarter earnings of $7.18 per share on revenue of $11.16 billion. Wedbush analyst Alicia Reese maintains an Outperform rating on the streaming giant, noting that “Netflix has established a virtually insurmountable lead in the streaming wars.”
The week concludes with reports from American Express (AXP), Charles Schwab (SCHW), and 3M (MMM) on Friday.
According to FactSet, analysts estimate a year-over-year earnings growth rate of 4.8% for S&P 500 companies this quarter, which would mark the lowest earnings growth reported by the index since Q4 2023.
Economic Data and Fed Watch
Investors will also be closely monitoring economic data releases this week, particularly inflation figures that could influence the Federal Reserve’s interest rate decisions. The market remains sensitive to any signals about the timing and magnitude of potential rate cuts, especially as the Fed balances inflation concerns with economic growth objectives.
The White House has recently taken an increasingly aggressive stance against Federal Reserve Chair Jerome Powell, adding another layer of complexity to monetary policy considerations. This tension comes as markets continue to digest the implications of potential policy shifts under the current administration.
Looking Ahead: Market Outlook
As the trading week begins, market participants face a complex landscape of trade tensions, corporate earnings, and economic indicators. The escalation of tariff threats has injected renewed volatility into global markets, potentially overshadowing what analysts had expected to be a relatively strong earnings season.
Investors will be watching closely for any signs of resolution in trade disputes, as well as guidance from company executives about how they plan to navigate the changing trade environment. With major banks kicking off earnings season, their outlook on consumer spending, loan demand, and overall economic conditions will be particularly significant.
The combination of trade uncertainty, upcoming earnings reports, and economic data releases suggests that markets could experience heightened volatility in the days ahead, as investors reassess growth prospects and policy implications for the remainder of 2025.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.