By Lisa Pauline Mattackal and Purvi Agarwal
(Reuters) -U.S. stock index futures rebounded on Tuesday following a fall in equities in the previous session, when President Donald Trump’s escalating criticism of Federal Reserve Chair Jerome Powell rattled investors.
All three major indexes ended Monday’s session more than 2% lower after Trump redoubled his attacks against Powell for not cutting interest rates, sparking concern about the central bank’s autonomy and the future monetary policy path.
The mood remained fragile as investors awaited Trump’s next steps vis-à-vis Powell. Clarity on U.S. tariff policy and the outcome of negotiations with individual countries on reciprocal levies are also in focus.
Meanwhile, Trump’s legal ability to fire the Fed chair remains unclear.
Investors have exited U.S. assets over the last week even as other safe-haven holdings, most notably gold, have surged. However the dollar and U.S. equities have slid while Treasury yields – which move inversely to prices – have risen.
“The market is pricing in a political risk premium for U.S. assets,” said Kathleen Brooks, research director at XTB.
Those moves are “causing existential angst among investors, which is inevitably weighing on equities and risk sentiment, with U.S. stocks in the firing line”.
Investors will focus on a slew of corporate results that are due through the week for indications on how companies are navigating the uncertainty caused by tariffs and their expectations for a hit to future earnings.
Verizon fell 3.6% after posting a higher quarterly subscriber loss, while Northrop Grumman slumped 8.7% after its quarterly results.
Tesla, which will kick off earnings for the “Magnificent Seven” group of megacap stocks after markets close, rose 0.8% in premarket trading.
Josh Gilbert, market analyst at eToro, said investors are looking for clarity on the impact of auto tariffs, Tesla top boss Elon Musk’s advisory role in the Trump administration as well as the rollout of cheaper EVs.
“Musk needs to deliver some magic and step up to the plate… these three areas will be huge in Tesla’s 2025 comeback or continued struggle.”
At 06:56 a.m. ET, Dow E-minis were up 298 points, or 0.78%, S&P 500 E-minis were up 46.5 points, or 0.90%, and Nasdaq 100 E-minis were up 166.5 points, or 0.93%
Megacap tech stocks, among the hardest hit by Monday’s selloff, also recovered. Nvidia added 1.2%, Amazon.com was up 1.1% and Apple gained 1%.
First Solar gained 7.1% after U.S. trade officials finalized steep tariff levels on most solar cells from South Asia.
