US stock futures edge higher: Tariff fears return; investors cautious
US stock futures edged higher after a sharp market sell-off, as investors remained cautious ahead of President Donald Trump’s Davos speech. Markets are under pressure from renewed tariff fears, rising bond yields, slowing job growth, and volatile energy prices. Investors are also closely watching key corporate earnings for signals on economic strength.
Rise in stock
US stock futures traded higher on Wednesday, signaling a weak recovery after heavy losses in the previous session. Dow Jones futures rose about 49 points, while futures linked to the S&P 500 and Nasdaq also posted small gains. The move followed a sharp sell-off on Tuesday, when US markets recorded one of their biggest declines this year. The Dow Jones Industrial Average dropped nearly 871 points. The S&P 500 and Nasdaq Composite fell more than 2% each. Technology stocks led the fall, dragging the broader market lower.
Geopolitical tensions
The sell-off was triggered by President Donald Trump’s announcement of higher tariffs on eight European countries. The decision is linked to rising tensions between the US and Denmark over Greenland. The development raised fears of a wider trade conflict between major economies. Investors are now focused on Trump’s speech at the World Economic Forum in Davos, scheduled for later on Wednesday. Markets expect that any strong comments on trade or foreign policy could cause fresh volatility. Traders say the small rise in futures reflects caution rather than confidence.
Bond markets
Bond markets are adding to investor concerns. The US 10-year Treasury yield climbed to around 4.29%, its highest level in several months. Higher yields increase borrowing costs for businesses and consumers. They also put pressure on sectors such as housing, real estate, and technology. At the same time, new data shows that job growth in the US is slowing. A recent private payrolls report indicated that only about 8,000 jobs are being added each week. This suggests the labor market is cooling. Investors worry that high interest rates could slow the economy further.
Energy markets
Energy markets remain volatile. Crude oil prices slipped on Wednesday after recent gains. Natural gas prices surged sharply earlier in the week, posting their biggest one-day rise in nearly three years. Rising energy costs could hurt companies and reduce consumer spending. Corporate earnings are also in focus. Netflix reported results that slightly beat estimates but gave a weak outlook, pushing its shares lower. United Airlines posted better-than-expected earnings, helping its stock recover some losses. Investors are now watching results from major companies such as Intel, Amazon, Microsoft, and Johnson & Johnson.