Dow, S&P 500, Nasdaq futures edge lower as China hits back on tariffs

US stock futures slipped on Tuesday as investors assessed China’s instant retaliation to US President Donald Trump’s additional tariffs, amid worries about the risk of a trade war.

Contracts on the Dow Jones Industrial Average (YM=F) and the S&P 500 (ES=F) both edged down roughly 0.2%. Futures on the tech-heavy Nasdaq 100 (NQ=F) were broadly flat on the heels of a losing day for stocks.

Beijing reacted swiftly on Tuesday to Trump’s additional 10% levies on Chinese imports going into effect at midnight. China slapped tariffs of 15% on US coal and liquified natural gas, starting Feb. 10, alongside 10% duties on imports of crude oil, farm equipment, and some autos.

The tit-for-tat measures raise the risk of an escalation into trade war that would damage both of the world’s top two economies. But some on Wall Street see the Chinese response as showing restraint that opens the door to compromise, as seen in the US tariff postponement deals with Mexico and Canada.

Giving more cause for optimism, Trump brought forward talks with China’s President XI. He said on Monday they would take place “probably over the next 24 hours”, rather than later in the week.

The US dollar index (DX-Y.NYB) fell slightly, down 0.3% as worries eased somewhat.

Meanwhile, China opened an antitrust investigation into Alphabet’s (GOOG, GOOGL) Google and added Calvin Klein owner PVH (PVH) and biotech company Illumina (ILMN) to its “unreliable entities list”.

Alphabet shares were little changed in pre-market trading, as investors wait for the tech megacap’s fourth quarter results due after the bell. The focus is on insights into the tech giant’s efforts to turn its massive AI investments into new revenue streams and its response to Chinese startup DeepSeek’s cheaper AI models.

A big week of earnings reports is underway, with reports from Spotify (SPOT), PayPal (PYPL), AMD (AMD), and Chipotle (CMG) also highlights on Tuesday’s docket. Less than halfway through the season, the S&P 500’s earnings growth is on track to outpace last year’s fourth quarter.

Palantir (PLTR) brought some upbeat news to Wall Street after the bell on Monday, as the intelligence software company’s first quarter and annual revenue forecasts both exceeded expectations. Palantir shares rocketed up 18%.

On the data front, a reading on job openings in December is due later, laying the groundwork for Friday’s crucial monthly jobs report.

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