U.S. stock futures showed little change Tuesday as investors awaited a fresh wave of earnings reports from prominent companies. Despite encouraging results so far, uncertainty surrounding tariffs continues to cast a shadow over the economic landscape. Meanwhile, reports reveal that the ambitious AI partnership between OpenAI and SoftBank is facing setbacks. Additionally, speculation grows about potential mergers in the U.S. freight rail industry.
Futures hold ground
By early Tuesday, futures tied to the Dow Jones, S&P 500, and Nasdaq 100 were largely flat, as traders caught their breath ahead of upcoming earnings.
Both the S&P 500 and the Nasdaq Composite hit record highs in the previous session, buoyed by positive corporate earnings news.
Shares of Alphabet Inc. (NASDAQ:GOOGL), Google’s parent, advanced ahead of Wednesday’s earnings release. Alphabet is part of the influential “Magnificent Seven” tech giants reporting this week, along with Tesla (NASDAQ:TSLA), whose shares dipped slightly Monday.
Verizon Communications (NYSE:VZ) rose nearly 4% after raising its lower guidance for annual profit growth.
While earnings season accelerates, markets remain alert to developments around looming U.S. tariffs. The August 1 deadline for President Donald Trump’s proposed “reciprocal” tariffs approaches, and media reports suggest limited progress in trade talks with several countries.
The corporate sector’s response to these tariff risks remains a central theme in this earnings cycle.
Earnings to watch
Tuesday’s schedule features key reports from homebuilders DR Horton (NYSE:DHI) and PulteGroup (NYSE:PHM), which may shed light on the housing market amid higher mortgage rates and economic concerns. Analysts note that potential Fed rate cuts later this year could encourage homebuying.
General Motors (NYSE:GM) has flagged a $4 billion to $5 billion annual earnings hit from tariffs, and investors will look for updates on trade outlooks.
Additional reports before the open include Coca-Cola (NYSE:KO), Philip Morris International (NYSE:PM), and defense contractors RTX Corp. (NYSE:RTX) and Lockheed Martin (NYSE:LMT). Post-close earnings come from Texas Instruments (NASDAQ:TXN) and Intuitive Surgical (NASDAQ:ISRG).
NXP Semiconductors (NASDAQ: NXPI) reported a 6% drop in Q2 revenue Monday after hours, weighed down by weakness in communications and infrastructure, causing shares to fall in extended trading.
OpenAI-SoftBank AI venture faces challenges, WSJ reports
The Wall Street Journal reported that the $500 billion joint effort between OpenAI and SoftBank to accelerate U.S. AI development has encountered hurdles.
Sources familiar with the project, called “Stargate,” say its near-term ambitions have been scaled back sharply. Despite the high-profile launch by OpenAI CEO Sam Altman, SoftBank’s Masayoshi Son, and President Trump six months ago, no data center contracts have yet been signed.
Disputes over partnership terms, including data center locations, have delayed progress, the WSJ added.
Though SoftBank pledged an immediate $100 billion investment in January, plans have shifted toward launching a smaller data center, likely in Ohio, later this year. Altman and Son maintain that their collaboration is advancing well.
Vital Knowledge analysts suggest this could benefit Microsoft (NASDAQ: MSFT), as OpenAI may need to rely on Microsoft’s Azure cloud longer than anticipated.
“But it does raise questions about some of the hype that’s formed around the industry, where huge investment figures are cavalierly thrown out and used as justification for ever-expanding valuations when a lot of the numbers are either recycled, double-counted, or vaporware,” the analysts commented.
Freight rail merger talks gain momentum
Semafor reports that Berkshire Hathaway’s BNSF has engaged Goldman Sachs to explore acquiring a rival freight rail firm.
It remains uncertain whether BNSF targets Norfolk Southern (NYSE:NSC) or CSX Corp (NASDAQ:CSX). Reuters notes that Jacksonville-based CSX is also considering hiring financial advisors.
These developments follow reports that Union Pacific (NYSE:UNP), the largest U.S. freight operator, is exploring buying Norfolk Southern, creating a massive $200 billion rail network spanning the country. This would be one of the largest deals since Canadian Pacific’s merger with Kansas City Southern four years ago, which Goldman Sachs advised.
Analysts warn regulatory hurdles loom, with questions about the Trump administration’s appetite for such big deals.
Gold retreats from recent highs
Gold prices eased on Tuesday, retreating from a one-month peak hit the day before amid profit-taking and a modest rebound in the U.S. dollar.
The precious metal’s safe-haven appeal had strengthened amid reports the European Union is preparing countermeasures against U.S. “reciprocal” tariffs. The U.S. reportedly seeks tariffs of at least 15% on the EU, which wants to maintain its current 10% rate.
Uncertainty around U.S. interest rates and Federal Reserve independence has also supported safe-haven demand. The Fed is widely expected to hold rates steady next week despite President Trump’s calls for immediate cuts.
Spot gold dropped 0.4% to $3,383.63 an ounce, with futures down 0.3% to $3,395.62 an ounce as of early Tuesday. On Monday, spot gold rose 1.4% to nearly $3,400 per ounce.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.