U.S. stock futures dipped slightly Tuesday after a strong session on Monday, where global stocks hit a new record. Investors are watching for the return of U.S.-Canada trade talks and a weakening dollar. Meanwhile, President Trump sharply criticized Federal Reserve Chair Jerome Powell in a handwritten letter, urging him to cut interest rates significantly. Powell is also scheduled to speak at a major central banking panel in Portugal. Additionally, the White House is reportedly narrowing its trade goals as a key tariff deadline approaches.
1. U.S. Futures Dip Slightly
U.S. stock futures were slightly lower early Tuesday. As of 03:32 ET:
- Dow futures were down 30 points (-0.1%)
- S&P 500 futures down 11 points (-0.2%)
- Nasdaq 100 futures down 56 points (-0.3%)
Monday’s rally was driven by hopes of renewed U.S.-Canada trade talks. However, investor optimism is tempered by concerns that a massive tax-and-spending bill in the Senate could further increase the already enormous $36.2 trillion U.S. federal debt.
Markets are also awaiting important data this week, including Thursday’s June jobs report. Today, focus will be on U.S. manufacturing activity.
2. Trump Intensifies Pressure on Powell
President Trump criticized Fed Chair Jerome Powell again, accusing him of being “too late” in cutting interest rates. In a handwritten note, Trump urged major rate cuts, arguing that the U.S. is losing “hundreds of billions” due to high borrowing costs. He also suggested the U.S. should have rates around 1%.
Despite Trump’s pressure, Powell has adopted a cautious stance, keeping rates at 4.25%–4.5%, citing economic uncertainty partly due to Trump’s tariff policies. Trump may be considering naming a potential successor to Powell, which could undermine Powell’s authority, according to analysts.
3. Key Sintra Panel: Global Central Bank Leaders Speak
Powell will join a high-profile panel at the European Central Bank’s annual forum in Sintra, Portugal, alongside ECB President Christine Lagarde and central bank leaders from Japan, the UK, and South Korea.
A major topic may be the declining role of the U.S. dollar as the dominant global currency. The dollar is off to its worst start to a year since the 1970s. Lagarde highlighted global “uncertainty” as a major ongoing theme due to unclear U.S. tariff and fiscal policy.
4. U.S. Narrows Trade Goals
According to the Financial Times, the U.S. is shifting focus to limited trade deals with selected countries ahead of a July 9 tariff deadline. These smaller agreements are aimed at avoiding steep “reciprocal” tariffs (up to 50%).
This is a shift from Trump’s original plan for 90 comprehensive deals during a 90-day tariff pause that started April 2. Though some tariffs may be avoided, a 10% base tariff would remain while broader issues are negotiated. The administration is also still considering new sector-specific tariffs.
5. Oil Prices Volatile
Oil prices are choppy, hitting a three-week low as supply concerns ease and expectations rise for an OPEC+ production increase.
As of 03:38 ET:
- Brent crude was down 0.4% at $66.47/barrel
- WTI crude was down 0.5% at $64.81/barrel
OPEC+ is expected to increase output by 411,000 barrels/day in August. This follows similar hikes in previous months, though total increases still don’t match earlier production cuts over the past two years.