U.S. stock futures were edging down early on Tuesday, threatening to break a two-day winning streak. Traders look to be weighing bargain hunting against the risk of renewed volatility.
Dow Jones Industrial Average futures were down 78 points, or 0.2%. S&P 500 futures were falling 0.2% and Nasdaq 100 futures were dropping 0.3%.
The vast majority of S&P 500 stocks rose on Monday. Commerce Department data indicated retail sales rose by a seasonally adjusted 0.2% in February from January. Economists had forecast a gain of 0.6% but, excluding sales at automobile and auto-parts dealers, sales rose in line with expectations.
However, the VIX—which measures the expected volatility in the S&P 500 over the next 30 days—closed Monday at 20.51, compared with its 10-year average of 18.30. The market’s so-called ‘fear gauge’ looks to be implying continued sharp moves in the short term.
U.S. officials have recently weighed whether to simplify the complex task of devising new tariff rates for hundreds of the country’s trading partners by instead sorting nations into one of three tariff tiers, The Wall Street Journal reported overnight. However, the administration is still pursuing the plan of individualized reciprocal tariffs for each country by the self-imposed deadline of April 2.
On Wednesday, the Federal Reserve will announce its interest-rate decision, followed by a press conference from Fed Chair Jerome Powell.
“The Fed has a decision to make and, for now, a stagnant economy doesn’t fully justify cuts if tariffs could exacerbate inflation. The interest rate pressure on consumers and businesses could continue, even if the employment side of the mandate demands some attention,” wrote Callie Cox, chief market strategist at Ritholtz Wealth Management.
The yield on the benchmark 10-year Treasury note stood at 4.304% early Tuesday, broadly flat from the previous day.
Eyes will also be on Nvidia’s annual GTC developers conference, which features a keynote from Chief Executive Jensen Huang on Tuesday.