U.S. stock futures edged lower Tuesday after Monday’s robust gains that pushed global markets to fresh intraday peaks. Investors are closely monitoring progress in U.S.-Canada trade talks and the softer U.S. dollar while bracing for important economic data scheduled later this week.
As of early Tuesday (07:32 GMT), Dow futures dipped by 30 points (-0.1%), S&P 500 futures lost 11 points (-0.2%), and Nasdaq 100 futures fell 56 points (-0.3%). Monday’s rally was largely driven by hopes for renewed trade negotiations between the U.S. and Canada. Still, worries persist around a sweeping tax and spending package under Senate review that could add substantially to the already staggering $36.2 trillion national debt.
Analysts from Vital Knowledge pointed out that despite headline-driven swings, “there remains little immediate concern about the reconciliation bill or tariff issues.”
Trump Turns Up Pressure on Fed Chair Powell
President Donald Trump escalated his criticism of Federal Reserve Chair Jerome Powell by sending a sharply worded handwritten note urging a rapid and sizeable reduction in interest rates. Accompanying the letter was a chart comparing global central bank rates, with Trump arguing the U.S. should aim for borrowing costs near or below 1%.
His message was blunt: “As usual, too late,” lamenting that the U.S. is losing “hundreds of billions” due to current Fed policies. This follows the Fed’s decision last month to keep rates steady between 4.25% and 4.5%, with Powell maintaining a cautious, wait-and-see stance amid uncertainties fueled by Trump’s tough tariff approach.
Frustrated by what he sees as a sluggish response relative to other countries, Trump has repeatedly criticized Powell and is reportedly considering replacing him before year-end — a move experts warn could undermine the Fed chair’s independence.
Powell to Speak at ECB Forum Amid Market Volatility
Jerome Powell is set to headline a prominent panel at the European Central Bank’s annual forum in Sintra, Portugal, alongside ECB President Christine Lagarde and central bank leaders from Japan, the U.K., and South Korea.
Discussions are expected to focus on the evolving role of the U.S. dollar as the dominant global reserve currency — especially given its sharp decline this year, marking the worst start since the 1970s — largely driven by Trump’s protectionist trade policies.
Uncertainty is expected to be a key theme, with Lagarde noting in her opening remarks that unclear U.S. tariff directions and fiscal policy plans remain significant headwinds for the global economy.
U.S. Shifts Toward Targeted Trade Deals Ahead of Tariff Deadline
The Financial Times reports that the U.S. government is narrowing its trade ambitions to secure quick wins before the July 9 deadline when reciprocal tariffs could return.
Instead of pursuing the initial plan of 90 broad trade agreements during the 90-day tariff pause that started April 2, officials are now focusing on “agreements in principle” on specific issues with select partners. This strategy aims to avoid tariffs as high as 50%, although a base 10% tariff would persist while broader talks continue.
Trade negotiations remain complicated, with the administration still contemplating tariffs on key sectors even as it pursues this phased approach.
Oil Markets Experience Volatility Ahead of OPEC+ Meeting
Oil prices saw choppy trading Tuesday, slipping after reaching a three-week low amid eased supply worries and anticipation of higher output from OPEC+.
At 03:38 ET, Brent crude futures dropped 0.4% to $66.47 a barrel, having earlier hit their lowest since June 11, just before the Israel-Iran conflict erupted. U.S. West Texas Intermediate futures declined 0.5% to $64.81 a barrel.
OPEC+ is set to meet on July 6. According to Reuters, the group plans to raise production by 411,000 barrels per day in August, following similar hikes in the previous three months. This would bring the total increase for 2025 to about 1.78 million barrels per day, still less than cuts made over the past two years.