Stock markets appeared ready for a modest bounce-back Tuesday morning following a sharp downturn in the previous trading session, as investors continued grappling with uncertainty surrounding President Donald Trump’s trade policies and mounting anxiety about artificial intelligence’s impact on various industries.
Advanced Micro Devices emerged as an early standout, surging nearly 10% in pre-market activity after the semiconductor company announced a significant agreement to supply Meta Platforms with as much as $60 billion in AI processing chips over a five-year period.
Home improvement retailer Home Depot also showed strength with a 2.5% increase after delivering fourth-quarter earnings that exceeded analyst expectations while keeping its yearly projections unchanged.
Monday’s trading session saw all three primary market indices drop more than 1%, with banking and technology software shares experiencing particularly heavy losses. The decline followed market uncertainty stemming from a U.S. Supreme Court decision Friday regarding Trump’s tariff authority, prompting investors to move away from riskier investments.
Following Friday’s court ruling, Trump implemented a temporary worldwide tariff of 10% that took effect Tuesday. The president later mentioned the rate could reach 15%, though the timing and application of this higher rate remained uncertain.
“The market doesn’t only have one particular worry… the AI trade has certainly become a worry for the market but then there are geopolitical concerns, macro concerns and of course, the tariff concerns,” said Peter Cardillo, chief market economist at Spartan Capital Securities.
Market analysts also pointed to Monday’s sell-off being influenced by a pessimistic analysis from Citrini Research that highlighted potential risks to the worldwide economy from advancing artificial intelligence technology.
As of 8:29 a.m. Eastern Time, Dow futures climbed 86 points or 0.18%, while S&P 500 futures increased 5.5 points or 0.08%, and Nasdaq 100 futures advanced 93.75 points or 0.38%.
Large technology companies showed mixed performance, with Nvidia declining 0.7% ahead of its quarterly earnings announcement scheduled for Wednesday after market close. Meanwhile, Alphabet and Apple posted slight gains.
Keysight Technologies experienced a notable jump of 14.5% after the electronic testing equipment manufacturer projected second-quarter earnings above Wall Street forecasts.
Conversely, Hims & Hers Health dropped 4.9% following the digital healthcare company’s forecast of first-quarter revenue falling short of analyst estimates.
Major software companies Salesforce and Intuit are set to release earnings reports later this week, with their performance expected to receive extra attention as the technology sector faces increasing concerns about AI-related disruption.
The S&P 500 software and services sector index, which has fallen nearly 24% year-to-date, continued its struggles with a 4.3% decline Monday, marking it as one of the session’s poorest-performing areas.
February has proven challenging for U.S. equities as elevated stock prices and artificial intelligence uncertainties have weighed on technology and other sectors, with market participants questioning whether substantial AI investments are generating expected returns.
President Trump is scheduled to deliver his State of the Union address to Congress Tuesday evening. Additionally, at least six Federal Reserve officials are expected to make public remarks throughout the day, with investors listening for clues about future monetary policy direction.
Market participants currently anticipate the Federal Reserve will maintain current interest rates at its March meeting, with the next rate reduction not expected until June, based on CME FedWatch Tool data.
