TSX runs higher on rate cut expectations
Investing.com - U.S. stock futures pointed into the green on Tuesday, as investors looked ahead to new economic data this week and eyed fears over a possible recession. Delta Air Lines (NYSE:DAL) issues a profit warning for its first quarter, citing the impact of uncertainty around U.S. President Donald Trump’s tariff policies. Oracle’s (NYSE:ORCL) quarterly results slightly miss estimates, but the technology firm offers an upbeat outlook for its artificial intelligence-enhanced cloud computing service.
1. Futures higher after sell-off
U.S. stock futures were higher after fears over a potential recession sparked sharp declines on Wall Street in the prior session.
By 07:03 ET (11:03 GMT), the S&P 500 futures contract had risen by 14 points or 0.3%, Nasdaq 100 futures had added 72 points or 0.4%, and Dow futures had inched up by 109 points or 0.3%.
The major averages sank on Monday, pulled down by fears that President Trump’s tariff plans could refuel inflationary pressures and weigh on growth. Over the weekend, Trump declined to predict if the U.S. was heading towards a downturn, saying in an interview with Fox News that there would be a "period of transition" because of the levies.
Adding to the dour sentiment in markets was uncertainty swirling around Trump’s mass layoffs of federal employees and discussions in Washington on a bill to avert a government shutdown. House Republicans are expected to vote on a spending package backed by Trump on Tuesday.
The benchmark S&P 500 slumped by 2.7%, extending a sell-off last week, and the tech-heavy Nasdaq 100 dropped to its worst day since 2022. The 30-stock Dow Jones Industrial Average tumbled by 2.1%.
Treasury yields, which move inversely to prices, also fell, with analysts attributing the drop to a sign of ongoing nervousness around the state of the economy. The U.S. dollar index, a tracker of the greenback against a basket of its currency peers, ticked higher as well.
Meanwhile, the CBOE Volatility index, dubbed the "fear index" by many investors, jumped to its highest close since August 2024.
"Severe risk-off and elevated volatility characterised a rough day for U.S. markets," analysts at ING said in a note to clients. "No Monday crash here, but certainly a slow-grind move south, extending from preliminary weakness last week."
2. Delta Air Lines profit warning
Shares in Delta Air Lines tumbled in extended hours trading, adding to losses logged on Monday, after the carrier issued a profit warning it linked to U.S. economic uncertainty.
Delta now expects to post first-quarter profit per share of $0.30 to $0.50, versus previous estimates of $0.70 to $1.00. Revenue growth is also tipped to grow 3% to 4% on a year-on-year basis, down from earlier guidance of 7% to 9%.
“Consumers in a discretionary business do not like uncertainty,” CEO Ed Bastian told CNBC, noting that corporate spending in particular is starting to stall.
The stock prices of Delta’s U.S. peers like United Airlines (NASDAQ:UAL) and American Airlines (NASDAQ:AAL) also declined, with analysts predicting that more outlook cuts are to come from the industry.
“Delta is a huge canary in the coal mine, and hopefully the White House is listening,” analysts at Vital Knowledge said in a note.
3. Oracle earnings
Shares in technology group Oracle dipped in afterhours trading, as investors assessed a modest shortfall in fiscal third-quarter results and weaker-than-anticipated current-quarter guidance.
However, the firm unveiled a surge in bookings that far outstripped Wall Street expectations, with Chairman Larry Ellison pointing to “record levels” of customer demand. Analysts also noted that the spike did not include any benefits from Oracle’s “Stargate” joint venture to build out U.S. artificial intelligence infrastructure.
Executives at the firm said they now expect revenue to grow by 15% in its 2026 fiscal year and by 20% in fiscal 2027, both surpassing estimates. The outlook from CEO Safra Catz was interpreted as a sign that there has been no slowdown in demand for Oracle’s AI-enhanced cloud computing services.
Catz told analysts that Oracle plans to more than double its capital expenditures to $16 billion during the 2025 fiscal year to help meet demand that is "dramatically" outpacing supply. However, analysts flagged lingering worries over the eventual financial returns and cost effectiveness of the soaring spending on AI.
4. JOLTS data ahead
On the economic calendar, markets will be awaiting the latest Job Openings and Labor Turnover Survey for January.
The number of available roles, a proxy for labor demand, is projected to have risen to 7.65 million. In December, the figure came in at 7.6 million following its biggest fall in 14 months.
Job openings for every unemployed person decreased as well to 1.1 from 1.5 in November, the report from the Labor Department showed.
A separate indicator last week showed the U.S. job growth picked up in February and the unemployment rate inched higher, although Trump’s trade policy and deep cuts to the federal workforce remained key sources of uncertainty.
Still, Fed Chair Jerome Powell said after the data that the U.S. economy "continues to be in a good place," citing ongoing -- albeit bumpy -- cooling in inflation and expansion in the labor market. Powell noted that a "solid" 191,000 jobs have been added on average per month since September.
He added that the Fed will keep hunting for clues inside of data points to separate the "signal from the noise" in the broader economic outlook. The central bank is expected to keep interest rates steady at its next policy gathering next week, although wagers have growth that it will cut borrowing costs multiple times before the end of the year.
5. Bitcoin pinned near $80,000
Bitcoin edged down on Tuesday, briefly falling to a fresh four-month low, as risk appetite was eroded by growing concerns over a U.S. recession and uncertainty over trade tariffs.
Broader crypto markets also dropped, as Trump’s recently announced plans for a national stockpile of digital assets sparked little enthusiasm. A crypto summit held at the White House last week also offered few cues on Trump’s regulatory plans for the industry.
Bitcoin has slipped for three weeks, with the token also taking little support from an announcement of a fresh capital raise from Strategy, the world’s biggest corporate Bitcoin holder, to buy more of the crypto.
The world’s biggest cryptocurrency declined 0.7% to $80,839.8 by 04:22 ET.