Market Indexes Retreat on Trade Uncertainty
U.S. stock futures declined Monday morning as investors digested news that President Donald Trump has delayed the implementation of his “reciprocal” tariffs until August 1, rather than the previously expected July 9 deadline. The S&P 500 futures dropped 0.4%, while Nasdaq-100 futures fell 0.5%, and Dow Jones Industrial Average futures slipped 0.1% in premarket trading.
This comes after a strong performance last week when both the S&P 500 and Nasdaq Composite closed at all-time highs on Friday. The S&P 500 has gained nearly 7% year-to-date, while the Dow is up 5.4% for 2025.
Adding to market concerns, Trump threatened an additional 10% tariff on countries that align with what he called the “Anti-American policies of BRICS,” referring to emerging market countries including Brazil, Russia, India, and China. The announcement coincided with the BRICS meeting currently underway in Rio de Janeiro, Brazil.
Premarket Movers: Volatility in Small Caps
Several stocks are making significant moves in premarket trading. Among the top gainers, Mullen Automotive (MULN) surged an impressive 80.27% on heavy volume of over 88 million shares. Sonnet BioTherapeutics (SONN) jumped 60.97%, while MediaCo Holding (MDIA) climbed 28.18%.
On the downside, MingZhu Logistics Holdings (YGMZ) fell 18.60%, Lixte Biotechnology (LIXT) dropped 18.02%, and Bitmine Immersion Technologies (BMNR) declined 17.47% in premarket markets today.
Nvidia (NVDA) continues to approach a historic milestone, with its market capitalization nearing $4 trillion after closing at an all-time high of $159.34 last Thursday. The AI chipmaker is poised to potentially become the first company to reach the $4 trillion valuation threshold, surpassing Apple’s previous record of $3.91 trillion from December.
Upcoming Market Events: Earnings Season Begins
This week marks the beginning of what could be a pivotal second-quarter earnings season. While Monday’s calendar is light, several notable companies are scheduled to report throughout the week.
Delta Air Lines (DAL) will report its second-quarter results before Thursday’s opening bell, providing important insights into the travel sector amid economic uncertainty related to global trade. CEO Ed Bastian previously withdrew the company’s optimistic forecast for 2025, citing “broad economic uncertainty around global trade.” Wall Street expects Delta to report earnings per share of $2.02 on revenue of $15.4 billion.
Other companies reporting this week include Conagra (CAG), Helen of Troy (HELE), and Simply Good Foods (SMPL) on Thursday morning, followed by Levi Strauss (LEVI), PriceSmart (PSMT), and WD-40 (WDFC) after Thursday’s close.
Economic Outlook and Federal Reserve Watch
Markets continue to process last week’s stronger-than-expected jobs report, which showed the unemployment rate dropping to 4.1% in June from 4.2% in May.
The unexpected strength in the labor market particularly pressured homebuilder stocks last Thursday, with Lennar (LEN) dropping 4.1%, D.R. Horton (DHI) falling 2.7%, and NVR Inc. (NVR) declining 1.9% as hopes for lower mortgage rates dimmed.
Global Markets and Trade Tensions
European markets showed mixed performance Monday morning, with Germany’s DAX gaining 0.4% while London’s FTSE 100 slipped 0.1%.
Treasury Secretary Scott Bessent stated on CNN’s “State of the Union” that tariffs will return to April 2 levels on August 1 if there is no progress on signing trade deals with the United States. This clarification comes after confusion about the timeline for implementing the tariffs that were announced earlier this year.
Market Analyst Perspectives
Despite concerns about tariffs, some analysts remain optimistic about the market’s trajectory. Tom Lee, head of research at Fundstrat Global Advisors, suggested on CNBC that companies might demonstrate their ability to navigate tariffs during the upcoming earnings season, potentially leading to positive surprises.
“I agree with anybody who says that, ‘Look, we’ve reshaped some of the economic flows around tariffs,’ but that’s an upside story because if it plays out better, that’s an earnings surprise,” Lee said, adding: “This is the most hated V-shaped rally.”
Rajeev Sibal, senior global economist at Morgan Stanley, noted that trade negotiations typically take significant time, with U.S. free trade arrangements historically taking an average of three years to negotiate. “While the negotiations that are currently taking place are likely to be narrower than a full-fledged free trade agreement, the historical precedent remains informative,” Sibal wrote.
As markets navigate these complex trade dynamics and the beginning of earnings season, investors will be closely watching for signals about how companies are adapting to the uncertain economic environment and potential policy shifts in the months ahead.
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.