U.S. stock futures advanced early Tuesday, signaling potential follow-through after a strong start to the week. Despite lingering doubts about the health of the labor market, optimism over corporate earnings and increased expectations of a near-term interest rate cut by the Federal Reserve are supporting risk appetite. Meanwhile, Donald Trump reignited trade tensions, this time with India, warning of hefty tariffs in response to its continued imports of Russian oil. In corporate news, Palantir (NASDAQ:PLTR) shares surged after the company delivered record-breaking revenue driven by government demand.
Equities Rebound Continues
After Monday’s strong rally, U.S. futures continued trending upward. As of 03:37 ET, Dow futures were up 50 points (0.1%), S&P 500 futures gained 12 points (0.2%), and Nasdaq 100 futures rose 63 points (0.3%).
Markets appear to be stabilizing following last week’s sell-off, which was triggered by disappointing jobs data and renewed geopolitical friction. The Bureau of Labor Statistics revised employment figures for May and June downward, prompting Trump to remove the agency’s commissioner. The revisions raised questions about the durability of the recent U.S. economic momentum.
However, the shift in economic tone has fueled speculation that the Fed may act soon. According to Vital Knowledge analysts, “the probability of a September reduction now stands at around 90%, versus roughly 63% a week ago,” as shown by CME’s FedWatch Tool.
Additionally, companies have generally offered reassuring earnings commentary. “[T]he fact we’re coming through a […] earnings season where management teams didn’t sound dramatically alarmed about economic conditions is giving investors some comfort,” Vital Knowledge said.
Trump Targets India Over Russian Oil
In a fresh escalation of trade rhetoric, former President Donald Trump threatened steep new tariffs on Indian goods. He warned Monday that he would “substantially” raise duties in response to India’s ongoing purchases of Russian oil.
The threat comes alongside proposals for 25% reciprocal tariffs on Indian exports and potential duties of up to 100% on countries such as China and India that continue to buy Russian energy. Trump’s posture has hardened on Russia in recent weeks following failed ceasefire talks in Ukraine.
He also criticized India’s alignment with the BRICS coalition, claiming the group is working to weaken U.S. global influence.
According to Reuters, India is expected to maintain its current level of Russian oil imports. Officials in New Delhi have defended the relationship on strategic and economic grounds. In financial markets, Indian bonds slipped slightly, and some analysts anticipate that the Reserve Bank of India may respond with a rate cut this week.
Palantir Rockets Higher on AI Momentum
Palantir Technologies saw its shares jump in after-hours trading following a standout quarterly performance. The data analytics firm reported its highest revenue since going public in 2020, thanks largely to robust demand from U.S. government clients.
The company is benefiting from policy tailwinds, including Washington’s push for widespread AI adoption and the Pentagon’s willingness to procure software from alternative vendors. These dynamics have boosted interest in Palantir’s AI-powered defense and analytics solutions.
Second-quarter revenue surged 48% year-on-year to around $1 billion, beating Wall Street’s expectations. Notably, more than 40% of sales came from U.S. government contracts. The Peter Thiel-backed firm also exceeded forecasts for adjusted earnings.
Palantir now expects full-year revenue to fall between $4.14 billion and $4.15 billion, up from a previous range of $3.89 billion to $3.90 billion.
Caterpillar (NYSE:CAT) and Pfizer (NYSE:PFE) are due to release results before Tuesday’s market open, while AMD (NASDAQ:AMD) is scheduled to report after the close.
U.S. Services Sector in Focus
Markets will also be watching for key economic indicators this week. The ISM services PMI for July is forecast to tick up to 51.5 from 50.8 the previous month, signaling modest expansion. The services sector, which accounts for over two-thirds of the U.S. economy, has proven resilient despite broader macroeconomic pressures.
According to the ISM, a reading above 49 is generally associated with overall growth.
In addition, trade data for June is on the docket. Earlier GDP figures indicated a drop in imports last quarter following a surge earlier in the year tied to tariff-related stockpiling.
China’s Services Activity Surprises to the Upside
In Asia, China’s services sector outperformed expectations in July. The S&P Global China General Services PMI rose to 52.6 from 50.6, topping estimates of 50.4.
S&P Global cited strong domestic and international demand as key drivers. Beijing’s consumer stimulus efforts are bearing fruit, and services exports have largely escaped the effects of U.S. tariffs, which primarily target physical goods.
Despite a slowdown in manufacturing, services remain a bright spot for the Chinese economy. That contrast underscores the sector’s resilience even amid broader uncertainties.
Notably, S&P Global has ended its PMI sponsorship partnership with Caixin as of this month.
Palantir Technologies stock price
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