U.S. equity futures fluctuated on Tuesday as investors looked ahead to fresh economic data and another round of corporate earnings. A continued rotation out of technology stocks and into more defensive sectors remains a key theme, amid renewed debate about the impact of artificial intelligence developments and heavy capital spending on long-term profitability. Meanwhile, Brent crude prices slipped before scheduled talks between Washington and Tehran in Switzerland, and gold prices also moved lower. In after-hours focus, cybersecurity firm Palo Alto Networks (NASDAQ:PANW) is set to report quarterly results.
Futures edge lower
By 03:04 ET, Dow futures were down 26 points, or 0.1%. S&P 500 futures had declined 11 points, or 0.2%, while Nasdaq 100 futures were off by 99 points, or 0.4%. U.S. markets were closed on Monday for a public holiday, shortening the trading week.
Wall Street ended last Friday’s session mixed. Investors weighed concerns about how newly released AI models could disrupt multiple industries, while also questioning whether ongoing, substantial investment in AI infrastructure will translate into meaningful returns for large-cap technology companies.
At the same time, traders digested data showing U.S. headline consumer price growth cooled more than expected in January. The report increased speculation that the Federal Reserve may bring forward its next interest rate cut, after pausing its easing cycle last month.
Against this backdrop, the Nasdaq Composite slipped 0.2%, while the S&P 500 and Dow Jones Industrial Average posted modest gains.
Oil slips ahead of U.S.-Iran negotiations
Oil markets were subdued as attention turned to upcoming diplomatic discussions between U.S. and Iranian officials in Geneva.
A firmer dollar ahead of key economic releases and Federal Reserve signals this week also weighed on crude prices.
Brent crude futures for April delivery fell 0.7% to $68.13 per barrel. West Texas Intermediate futures rose 0.6% to $63.11 per barrel at 03:06 ET, with price action influenced by Monday’s U.S. holiday.
Media reports indicated that ministers from the U.S. and Iran are scheduled to hold talks in Switzerland concerning Tehran’s nuclear enrichment program. The negotiations come at a time of elevated military tensions in the Middle East, with the U.S. increasing its regional presence. President Donald Trump has repeatedly warned of possible military action should Iran refuse to agree to U.S. terms.
Trading volumes were also dampened by Lunar New Year holidays across several Asian markets, including China, Hong Kong, Taiwan, South Korea and Singapore.
Gold retreats
Precious metals pulled back as investors awaited upcoming U.S. economic indicators.
At 03:09 ET, spot gold dropped 1.4% to $4,919.72 per ounce, while April gold futures declined 2.2% to $4,941.74 per ounce.
Spot silver fell 2.0% to $75.0925 per ounce. Platinum edged up 0.2% to $2,024.79 per ounce.
Recent sessions have seen volatile swings in metal prices, with gold and silver still trading below late-January highs.
Market participants are now focused on a slate of U.S. data releases, including industrial production figures due Wednesday and the PCE price index — one of the Fed’s preferred inflation measures — scheduled for Friday. Minutes from the Fed’s January meeting, when policymakers kept rates steady at 3.5% to 3.75%, are also expected.
Palo Alto Networks in focus
Investors will be watching Palo Alto Networks’ results after Tuesday’s close for further insight into how technology firms are navigating intensified competition from newly introduced AI models.
The California-based cybersecurity company raised its full-year revenue and profit outlook in November, citing heightened demand for digital security solutions amid rising cyber threats.
It also unveiled a $3.35 billion acquisition of cloud management and monitoring firm Chronosphere, with plans to integrate the business into its Cortex AgentiX platform. The move is intended to allow Palo Alto’s AI-driven systems to leverage Chronosphere’s data to identify performance bottlenecks and diagnose underlying issues.
Together with a separate acquisition of identity security company CyberArk Software, the Chronosphere transaction is expected to close in the second half of Palo Alto’s fiscal 2026.
Nikkei extends declines
Japan’s Nikkei index fell again, building on losses from Monday after figures showed weaker-than-expected economic growth in the fourth quarter.
Official data revealed that Japan’s gross domestic product rose at an annualized rate of 0.2% in the October–December period, well below forecasts of 1.6%. Nonetheless, the reading marked an improvement from the third quarter, when the economy contracted by 2.6%.
The data underscore the economic challenges facing Prime Minister Sanae Takaichi’s administration following its recent election victory. While the government has signaled intentions to pursue stimulus measures to bolster growth, persistent cost-of-living pressures continue to weigh on domestic demand.
At the same time, the Bank of Japan faces its own balancing act, grappling with stubborn inflation and yen weakness. Policymakers have indicated they intend to continue gradually raising borrowing costs after years of ultra-loose monetary policy.