Stock Futures Rise Amid AI and Tariff Concerns

Market Recovery After AI and Tariff-Driven Sell-Off

Stock futures made a modest recovery on Tuesday following Monday's significant sell-off, which was fueled by concerns over the disruptive potential of artificial intelligence (AI) and new U.S. tariff policies. Dow Jones Industrial Average futures edged up 0.2%, S&P 500 futures remained near the flatline, and Nasdaq 100 futures rose 0.3%. This rebound comes after Monday's steep losses, where the Dow fell 1.7%, and the S&P 500 and Nasdaq each dropped over 1%.

Investors are closely monitoring developments in AI, especially as fears grow regarding its impact on various sectors, including software and corporate services. Additionally, the market is grappling with trade policy uncertainties as President Trump’s 10% global tariff hike came into effect, with discussions underway to potentially increase the rate to 15%. These factors have introduced volatility, keeping markets on edge while awaiting further clarity on both AI advancements and global trade negotiations.

Key Stock Movements and Corporate Updates

Advanced Micro Devices (AMD) shares surged 10% in premarket trading after the semiconductor company announced a major AI chip deal with Meta Platforms. The agreement involves AMD supplying 6 gigawatts of Instinct GPUs for Meta's AI infrastructure, a deal reportedly valued at $100 billion. This development underscores the increasing investment in AI technologies, which has reshaped market sentiment in recent weeks.

Earnings reports also influenced stock movements. Home Depot reported mixed results, with revenue falling slightly below expectations but earnings per share exceeding forecasts at $2.72 versus an anticipated $2.55. Same-store sales grew 0.4%, defying expectations of a decline. In contrast, Whirlpool shares dropped 9% after the company announced plans to issue $800 million in new shares to address debt concerns. These announcements highlight the varied corporate performance amid an uncertain economic environment.

Investor Focus on AI and Trade Policies

Anthropic's AI event on Tuesday has drawn significant investor interest as the company unveils updates to its Claude chatbot and other tools. These developments could further impact sectors already under pressure, such as software and consulting, as businesses adjust to rapid technological changes. Stocks like IBM and Datadog, which saw sharp declines on Monday, may be particularly sensitive to these updates.

Meanwhile, trade tensions are escalating following the U.S.’s implementation of a 10% tariff hike. Both the EU and Japan have expressed concerns about the potential impact on existing trade agreements, with the White House considering additional national-security-based tariffs. President Trump’s State of the Union address later in the day is expected to provide further insights into the administration’s trade strategy, which could influence market sentiment and global economic dynamics.