Wall St futures flat amid US-China trade jitters; bank earnings in focus

Investing.com-- U.S. stock index futures were mostly unchanged on Tuesday evening, following a choppy session on Wall Street as investors digested new developments in U.S.-China trade tension, large bank earnings, and remarks from Federal Reserve Chair Jerome Powell.

S&P 500 Futures traded flat at 6,686.75 points, while Nasdaq 100 Futures edged down 0.1% to 24,745.75 points by 20:22 ET (00:22 GMT). Dow Jones Futures were largely unchanged at 46,498.0 points.

Wall St ends mixed with focus on US-China tensions, Powell comments

Wall Street closed mixed in regular trading. The S&P 500 ticked 0.2% lower, while the NASDAQ Composite declined 0.7%. Dow Jones Industrial Average ended 0.4% higher.

The backdrop to markets has become more volatile after President Donald Trump last week threatened 100% tariffs on Chinese goods in retaliation for Beijing’s rare earth export constraints, setting off waves of caution across financial markets.

Tensions escalated further this week as Trump floated cutting off trade ties with China in the cooking‐oil space, accusing Beijing of “purposefully not buying” U.S. soybeans and describing the move as an “economically hostile act.”

Meanwhile, China has targeted U.S.-linked units of the South Korean shipbuilder Hanwha Ocean, sanctioning five subsidiaries in what observers view as retaliation over a U.S. probe of China’s shipbuilding dominance.

Both nations initiated reciprocal port fees on vessels tied to the other side, adding maritime pressure to the trade battle.

Against that fraught backdrop, market participants looked to Fed Chair Powell’s Tuesday remarks at the National Association for Business Economics.

Powell said the outlook for employment and inflation “does not appear to have changed much” since the Fed’s September meeting. He signaled that the U.S. economy may be on a firmer trajectory than some expected, but cautioned that a notably softer labor market is emerging.

The tone was read by markets as dovish, supporting expectations of further rate cuts later in 2025.

BoFA, Morgan Stanley earnings on tap

Earnings from major U.S. banks began rolling in on Tuesday, with solid results but mixed market reactions.

Goldman Sachs (NYSE:GS) beat expectations, boosted by strong investment banking fees, while JPMorgan (NYSE:JPM) raised its full‐year net interest income forecast after a robust quarter.

Wells Fargo (NYSE:WFC) also posted a profit beat, aided by higher deal activity and improved credit performance.

The banking sector broadly rallied even as some individual stocks slipped. Ahead on Wednesday, attention will shift to earnings from Bank of America (NYSE:BAC), Morgan Stanley (NYSE:MS), and others.