US Stocks Likely To Open Lower After Snapping 9-Day Streak: 'Downside Could Be Limited Even In A Mild Recession,' Says Expert

U.S. stock futures fell on Tuesday after snapping a nine-day winning streak on the S&P 500 index. Futures of major benchmark indices were lower in premarket.

After a remarkable 20-year high winning streak, the S&P 500 saw stocks decline on Monday. This reversal was triggered by two key statements from President Donald Trump: his proposal for a 100% tariff on foreign-made films and his announcement that he would not be discussing trade with Chinese President Xi Jinping this week.

Investors are keeping an eye on the Federal Reserve’s decision on interest rates, which is slated to be announced on Wednesday.

Meanwhile, the 10-year Treasury bond yielded 4.36% and the two-year bond was at 3.81%. The CME Group’s FedWatch tool‘s projections show markets pricing a 96.8% likelihood of the Federal Reserve keeping the current interest rates unchanged in its May meeting.

The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, fell in premarket on Tuesday. The SPY was down 0.82% to $558.89, while the QQQ declined 1.12% to $480.49, according to Benzinga Pro data.

Cues From Last Session:

Energy, consumer discretionary, and information technology sectors led Monday’s decline on the S&P 500, contributing to the index snapping a nine-session winning streak.

Bucking this trend, consumer staples stocks closed slightly higher.

Despite Monday’s losses, the major averages still recorded gains for the second consecutive week ended Friday: the S&P 500 rose by 2.9%, the Dow by 3%, and the Nasdaq by 3.4% for the week.

In company news, Skechers U.S.A. Inc. SKX saw its shares surge over 24% following an acquisition agreement by 3G Capital at $63 per share, while Tyson Foods Inc. TSN shares fell around 8% after disappointing second-quarter sales.

On the economic front, the ISM services PMI exceeded expectations, rising to 51.6 in April from March’s 50.8.

The Dow Jones index declined 99 points or 0.24% to 41,218.83, whereas the S&P 500 index fell 0.64% to 5,650.38. Nasdaq Composite ended 0.74% lower at 17,844.24, and the small-cap gauge, Russell 2000, tumbled 0.82% to 2,004.26.

Insights From Analysts:

WisdomTree senior economist Jeremy Siegel highlights the positive impact of the U.S. dollar’s decline on multinational earnings this year.

In his weekly commentary, he points out that roughly half of the S&P 500’s revenue is generated internationally, a factor he believes can mitigate the adverse effects of tariffs on corporate profits.

As Siegel states, “With 40-45% of S&P 500 revenues sourced abroad, that currency translation effect alone could cushion the impact of tariffs on corporate profits.”

He further suggests that, “This, alongside hopes of deal-making and eventual tariff de-escalation, is underpinning the market’s recovery.”

Moreover, Siegel remains optimistic about stocks, explaining that markets often overreact to recessions.

He argues, “While earnings may drop if the economy turns south, the long-horizon value of equities should not fall 20–25%, as often happens. If investors finally look beyond the valley into the mountain, the downside could be limited even in a mild recession.”

As the Federal Reserve is projected to keep the interest rates steady after the Wednesday’s meeting, Cooper Howard, director, fixed income strategy at the Schwab Center for Financial Research said, “The market’s pricing in between three and four cuts prior to the year-end, but that’s aggressive unless the labor market shows further signs of slowing.”

See Also: How to Trade Futures

Upcoming Economic Data

Here’s what investors will keep an eye on Tuesday:

• The U.S. trade deficit data for March will be out by 8:30 a.m.

Stocks In Focus:

• Marriott International Inc. MAR rose 0.62% in premarket on Tuesday as it is expected to report earnings before the opening bell. Analysts expect a quarterly earnings of $2.25 per share on revenue of $6.17 billion.

• Archer-Daniels-Midland Co. ADM fell 0.63% as Wall Street expects it to report earnings of 67 cents per share on revenue of $21.94 billion before the opening bell.

• Advanced Micro Devices Inc. AMD was 0.59% lower as it is expected to report earnings after the closing bell. Analysts expect a quarterly earnings of 94 cents per share on revenue of $7.13 billion.

• Celanese Corp. CE jumped 5.49% after posting better-than-expected results for its first quarter on Monday. The company said it sees second-quarter adjusted earnings of $1.30 to $1.50 per share, versus market estimates of $1.41 per share.

• Palantir Technologies Inc. PLTR dropped 7.89% despite reporting in-line earnings for its first quarter on Monday. Palantir reported first-quarter revenue of $883.86 million, beating analyst estimates of $862.83 million. The company reported first-quarter adjusted earnings of 13 cents per share, in line with analyst estimates.

• International Business Machines Corp. IBM was trading 074% lower after expanding its partnership with Oracle Corp. ORCL, down 1.07%. The companies aim to advance agentic AI and hybrid cloud, and also unveil hybrid AI technologies.

• Pony AI Inc. PONY was 11.34% higher after announcing a strategic partnership with Uber Technologies Inc. UBER to advance autonomous mobility.

Commodities, Gold, And Global Equity Markets:

Crude oil futures were trading higher in the early New York session by 2.78% to hover around $58.72 per barrel.

Gold Spot US Dollar rose 1.36% to hover around $3,376.57 per ounce. Its last record high stood at $3,500.33 per ounce. The U.S. Dollar Index spot was lower by 0.18% at the 99.6530 level.

Asian markets were mixed on Monday. India’s S&P BSE Sensex and Australia’s ASX 200 indices declined. While China’s CSI 300, Hong Kong’s Hang Seng, Japan’s Nikkei 225, and South Korea’s Kospi index rose. European markets were also mixed in early trade.

Read Next:

Photo courtesy: Shutterstock