Market Overview: Futures Attempt Recovery After Sharp Selloff

Introduction

U.S. stock futures rebound on Tuesday as investors attempt to recover from the previous session’s selloff, while markets assess rising AI disruption concerns and ongoing trade tariff uncertainty ahead of key Nvidia earnings.

U.S. stock index futures edged higher on Tuesday morning, attempting to stabilize after a significant selloff in the previous trading session. Investors are currently navigating two major sources of uncertainty: renewed trade tensions linked to U.S. tariff policy and rising concerns about the economic consequences of rapid AI disruption.

At 05:45 ET, Dow Jones Futures gained 0.1%, S&P 500 Futures rose 0.2%, and Nasdaq 100 Futures advanced 0.3%. The modest rebound follows Monday’s broad decline, when Wall Street indices retreated amid risk-off positioning.

Monday’s Decline: AI Disruption Narrative Triggers Risk Aversion

Major U.S. indices closed sharply lower in the prior session:

• Dow Jones Industrial Average: -1.7%

• NASDAQ Composite: -1.1%

• S&P 500: -1.0% (now negative year-to-date)

The selloff was partly driven by a research note from Citrini Research outlining a hypothetical long-term scenario in which artificial intelligence leads to large-scale white-collar job displacement. The report suggested potential knock-on effects including:

• Reduced consumer spending

• Rising loan defaults

• Slower economic growth

• Broader economic contraction

While the scenario remains speculative, markets reacted sensitively, highlighting growing investor unease around AI’s macroeconomic implications.

Trade Policy Uncertainty Returns to the Forefront

In parallel, global trade uncertainty remains elevated.

New U.S. tariffs took effect at a 10% baseline rate at midnight Tuesday, following a Supreme Court ruling that invalidated certain “reciprocal” levies previously introduced by President Donald Trump.

However, policy clarity remains limited. Although customs authorities communicated a 10% rate, reports indicate the White House is preparing a formal order that could raise the rate to 15%. This discrepancy has added another layer of uncertainty to global trade planning.

Countries that previously negotiated agreements with the U.S. are reportedly reassessing their positions in light of the court decision. In response, Trump publicly warned trade partners not to “play games,” reinforcing the unpredictability of the trade landscape.

For markets, uncertainty itself—not just the tariff level—remains the primary risk variable.

FedEx Challenges Tariff Payments

Adding to the complexity, FedEx has filed a lawsuit against the U.S. government seeking a full refund of emergency tariffs paid over the past year.

This marks the first major corporate action demanding reimbursement following the Supreme Court ruling. Other companies are also reportedly considering legal challenges.

An unresolved issue is what happens to more than $160 billion in tariff revenue already collected. The legal and political path forward remains unclear, and this ambiguity is weighing on investor sentiment.

Nvidia Earnings: A Critical AI Barometer

Technology sentiment remains fragile ahead of Nvidia’s quarterly earnings report, scheduled for Wednesday.

Nvidia is widely viewed as a bellwether for global AI demand. The company’s results are expected to show strong year-over-year growth, driven by continued demand for AI chips and data-center infrastructure.

However, expectations are high. Any signs of slowing momentum could amplify volatility in the Nasdaq and broader tech sector.

For traders, Nvidia’s report represents a high-impact event capable of shifting short-term market direction.

Media Sector: Paramount Raises Bid for Warner Bros Discovery

In corporate developments, Paramount Skydance has reportedly increased its offer for Warner Bros Discovery.

According to sources, the revised proposal improves on an earlier $30-per-share bid, valuing Warner at over $108 billion. Meanwhile, Netflix has already reached an agreement for Warner’s studios and streaming assets valued at approximately $27.75 per share in cash.

This developing bidding dynamic could reshape the competitive landscape in global streaming and media consolidation.

Earnings Watch: Home Depot Reports Before the Bell

Home Depot is set to release quarterly earnings before the opening bell.

The home-improvement retailer previously issued cautious guidance for fiscal 2026, citing softer demand for large discretionary purchases. Investors will be watching:

• Comparable sales growth

• Margin stability

• Consumer spending trends

The results may provide insight into the resilience of U.S. household consumption amid higher rates and economic uncertainty.

Oil Prices Near Seven-Month Highs

Crude oil remains elevated, trading near levels last seen in early August 2025.

• Brent crude: $70.95 per barrel

• WTI crude: $66.22 per barrel

Prices remain supported ahead of a new round of U.S.–Iran nuclear talks scheduled in Geneva later this week.

Geopolitical tensions continue to underpin risk premiums in energy markets. Any escalation—or breakthrough—in negotiations could generate significant volatility in oil prices.

Market Outlook: Fragile Recovery Amid Layered Risks

Although futures are attempting a rebound, the broader environment remains fragile.

Investors are balancing:

• AI-driven economic transformation risks

• Uncertain U.S. tariff policy

• Major earnings catalysts

• Geopolitical tensions in energy markets

Short-term direction will likely depend on Nvidia’s earnings and further clarity regarding tariff implementation.

Volatility remains elevated, and traders should prepare for rapid shifts in sentiment.