Dow Jones futures held near 48,870 in European hours on Tuesday. S&P 500 and Nasdaq 100 futures were near 6,850 and 24,780 ahead of the US open.<\/p>\n
US stock futures steadied after Monday declines on Wall Street. The Dow Jones fell 1.66%, the S&P 500 slipped 1.04%, and the Nasdaq 100 dropped 1.13%.<\/p>\n
Software and payments shares led the fall amid concerns about AI-driven disruption. IBM sank 13.1% after Anthropic launched new coding tools, and American Express fell 7.2% after research on AI-related job losses.<\/p>\n
Markets are watching earnings due later this week from Home Depot, Nvidia, Salesforce, and Snowflake. Traders have shifted away from risk-sensitive assets as US trade policy uncertainty increases.<\/p>\n
The Trump administration is considering national security tariffs under Section 232 of the Trade Expansion Act of 1962, after a Supreme Court ruling last week struck down some second-term levies. The Wall Street Journal said these would be separate from a 15% global tariff announced on Saturday.<\/p>\n
The EU indicated it may pause ratification of its US trade deal. Congress may not extend the new tariffs beyond a 150-day window, and India and the US delayed a three-day meeting on an interim trade pact.<\/p>\n
We are seeing US stock futures find some stability after a sharp sell-off on Monday. The market is nervous after rapid AI developments triggered a 1.66% drop in the Dow Jones. With the VIX, a key measure of market fear, having jumped over 15% yesterday to 19.5, we should expect continued choppiness.<\/p>\n
The dramatic fall in stocks like IBM and American Express highlights a new market sensitivity to AI disruption. This makes derivatives on technology and financial ETFs very active as traders position for more volatility. Upcoming earnings from Nvidia and Salesforce will be critical tests for the tech sector’s resilience.<\/p>\n
A new report from the Bureau of Labor Statistics projects AI could automate nearly 25% of tasks in exposed sectors within five years, lending credibility to these market fears. We can see this reflected in the options market, where the cost of insuring against a drop in the Financial Select Sector SPDR Fund (XLF) has risen to its highest level in six months. This suggests that traders are actively buying protection.<\/p>\n
The bigger risk we are watching is the escalating trade uncertainty from the White House. The consideration of new Section 232 tariffs introduces a major unpredictable element for global supply chains. This is prompting a clear rotation away from cyclical stocks and into more defensive positions.<\/p>\n
Looking back to the 2018-2019 period from the perspective of 2025, we recall how similar Section 232 tariffs on metals caused significant downturns in industrial and automotive stocks. During that time, the Dow experienced several single-day drops of over 2% immediately following tariff news. We should prepare for a repeat of this pattern if the new measures are confirmed.<\/p>\n
The hesitant responses from the EU and India suggest this trade dispute could broaden quickly. This global uncertainty is strengthening the US dollar, with the Dollar Index (DXY) climbing to a three-week high of 105.2. We can use currency futures or options to trade this safe-haven flow.<\/p>\n
Given these conditions, we should focus on protective strategies in the coming weeks. Buying put options on the S&P 500 or specific industrial ETFs offers a hedge against negative tariff surprises. For event-driven volatility like Nvidia’s earnings, using straddles or strangles could capitalize on a large price move in either direction.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" US futures steadied after Monday losses; AI disruption fears, key earnings ahead, and escalating US trade tariffs.<\/p>\n","protected":false},"author":62,"featured_media":16988,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-42686","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42686","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=42686"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42686\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16988"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=42686"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=42686"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=42686"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}