U.S. stock futures showed modest gains on Monday night, following a significant sell-off in the regular trading session. Investors are bracing for the potential impact of President Donald Trump’s tariffs on Mexico and Canada, which are set to take effect on Tuesday.
Futures linked to the Dow Jones Industrial Average climbed 72 points, or about 0.2%, while S&P 500 futures and Nasdaq 100 futures advanced by 0.2% and 0.3%, respectively.
Earlier in the day, the broad S&P 500 index experienced its largest daily loss since December, plunging 1.76%. The Dow dropped 649.67 points, or 1.48%, and the Nasdaq Composite saw a steeper decline of 2.64%.
The market initially rose before taking a sharp downturn when President Trump confirmed that the U.S. would impose a 25% tariff on goods from Canada and Mexico, effective the next day. He also announced an additional 10% tariff on Chinese imports, stating there was “no room left” for further negotiations with the two countries. This announcement further fueled market concerns about the impact of escalating trade tensions on the global economy.
The technology sector bore the brunt of Monday’s losses, with major stocks such as Nvidia dropping nearly 9% and Broadcom losing 6%. In contrast, defensive sectors like consumer staples and healthcare showed resilience, with consumer staples rising 0.6% and healthcare advancing 0.4%.
The day’s sharp sell-off left the S&P 500 in the red for 2025, deepening concerns about a potential market downturn. Scott Ladner, Chief Investment Officer at Horizon Investments, noted that the market is unlikely to experience a quick rebound, citing negative sentiment among investors. “We are at a place where sentiment is really in the toilet, and that makes getting reversals probably a little bit of a slog,” he told CNBC.
However, Ladner remained optimistic about the U.S. economy, noting that corporate earnings are expected to grow between 10% and 15%. “We’re not heading into a recession. We’re not even having an earnings recession,” he added. Despite the recent market volatility, Ladner’s medium-term outlook for the economy remains positive.
On the economic front, New York Federal Reserve President John Williams is scheduled to speak on Tuesday afternoon in New York, offering potential insights into the Fed’s outlook on the economy.
Earnings season continues to wind down, with results from major companies such as Best Buy, AutoZone, Target, and CrowdStrike scheduled for release on Tuesday, keeping investors on edge as they monitor the latest corporate performance amid rising global uncertainties.
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