Dow Jones and Nasdaq 100: Markets Drops as Powell Testifies, Coca-Cola Jumps 3%

Stock Futures Decline as Trade Tensions Rise, Powell’s Testimony in Focus

U.S. stock futures traded lower on Tuesday as investors braced for Federal Reserve Chair Jerome Powell’s testimony before Congress and monitored escalating global trade tensions.

Dow Jones Industrial Average futures fell 116 points, or 0.26%, while S&P 500 and Nasdaq 100 futures dropped 0.38% and 0.68%, respectively. Markets are on edge as traders assess the impact of new tariffs and await clarity on the Fed’s stance regarding inflation and interest rates.

Will Powell Address Tariff-Driven Inflation Risks?

Powell is set to testify before the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday. His remarks come at a crucial time, with President Donald Trump implementing fresh tariffs on steel and aluminum imports. The European Union has vowed to retaliate if the U.S. imposes additional levies on its goods.

Cleveland Fed President Beth Hammack reinforced a cautious approach to monetary policy, stating that inflation remains elevated and rate cuts are unlikely in the near term. Hammack highlighted strong consumer spending and tariff-related price pressures as risks to inflation. With markets already pricing in at least one rate cut this year, Powell’s testimony could influence expectations on how the Fed responds to these economic headwinds.

Earnings Results Drive Notable Stock Moves

Several corporate earnings reports spurred premarket stock movements. Coca-Cola gained 3% after exceeding Wall Street forecasts, reporting $11.54 billion in revenue versus expectations of $10.68 billion. DuPont de Nemours surged 5% following better-than-expected fourth-quarter earnings. AutoNation added 1% after beating analyst estimates.

 

On the downside, Shopify dropped 3% despite surpassing revenue expectations. Fluence Energy plunged 41% after reporting a wider-than-expected loss, while Coty fell 2.5% due to foreign exchange headwinds impacting future sales projections. Semiconductor stocks were mixed, with Lattice Semiconductor rising 14% on strong earnings, while Astera Labs declined 4.2% despite positive results.

Steelmakers Gain as Tariffs Take Effect

Steel and aluminum stocks outperformed following Trump’s tariff announcement. Cleveland-Cliffs rose 3.6%, while Steel Dynamics gained 2.1% after receiving an upgrade from KeyBanc, citing a favorable policy environment. Century Aluminum also edged higher.

Meanwhile, megacap tech stocks were under pressure. Apple and Amazon declined 0.6% and 0.7%, respectively, as investors rotated out of growth names. AI-linked stocks, which had driven Monday’s market rebound, also showed signs of profit-taking.

Yields and Inflation Data Could Shift Fed Expectations

The bond market is adjusting its outlook, with traders pricing in the risk of prolonged higher yields. The 10-year Treasury yield remains elevated, reflecting concerns that tariff-driven inflation could delay rate cuts. Some strategists now see the 10-year yield potentially returning to 5% if inflation pressures persist.

The upcoming Consumer Price Index (CPI) report on Wednesday and Producer Price Index (PPI) data on Thursday will be key catalysts for markets. Any upside surprise in inflation readings could reinforce the Fed’s stance of keeping rates steady for longer.

Market Outlook: Powell’s Testimony and Inflation Data in Focus

With Powell’s testimony set to dominate market sentiment, traders will be looking for any signals on whether the Fed is considering adjusting its policy in response to tariffs and inflation risks. Additionally, upcoming inflation data will be closely watched for signs of persistent price pressures. While earnings season continues to drive individual stock moves, the broader market direction will hinge on the Fed’s policy outlook and economic data in the days ahead.

More Information in our Economic Calendar.