Dow Jones futures rise even as tariffs and AI fears unsettle markets

US stock index futures edged higher on Tuesday, staging a modest rebound after a broad selloff a day earlier as investors assessed the economic implications of President Donald Trump’s tariff policy and rising concerns about artificial intelligence disruption.

Futures tied to the Dow Jones Industrial Average rose about 135 points, or 0.28%.

S&P 500 futures advanced 0.18%, while Nasdaq 100 futures gained about 0.25%.

The recovery followed sharp declines on Monday when all three major indexes fell more than 1%.

The Dow Jones Industrial Average dropped more than 800 points, while the S&P 500 fell about 1% and the Nasdaq slid 1.1%, pushing the benchmark index into negative territory for the year.

Tariffs and policy uncertainty weigh on sentiment

Investor caution intensified after the US Supreme Court ruled against the legal basis for Trump’s earlier tariffs.

In response, the administration announced a temporary global tariff of 10% that took effect Tuesday, later indicating the levy could rise to 15%, though details about timing and implementation remained unclear.

Analysts said the lack of clarity has kept markets unsettled.

Geopolitical tensions and trade uncertainty added to risk aversion.

Markets also reacted to the possibility of additional tariff increases and ongoing tensions between the United States and Iran.

Financial and software stocks were among the hardest hit sectors during Monday’s selloff, as investors moved away from higher-risk equities.

AI disruption fears hit technology and software stocks

Technology shares faced renewed pressure following a bearish report from Citrini Research warning about potential economic threats from artificial intelligence.

The report amplified concerns that AI could disrupt business models across multiple industries.

Anticipation surrounding new product announcements from AI company Anthropic also unsettled software stocks.

The S&P 500 software and services index, already down nearly 24% this year, dropped another 4.3% during Monday’s session.

Companies such as Microsoft and CrowdStrike were notable decliners, while IBM shares plunged roughly 13%.

Market strategists said the market may struggle to regain momentum without a recovery in technology stocks.

Corporate earnings and Fed outlook in focus

Despite the broader uncertainty, several individual stocks moved higher.

Home Depot climbed about 2.7% after beating fourth-quarter sales estimates, while Keysight Technologies surged more than 16% on stronger profit guidance.

Hims & Hers Health fell nearly 7% after forecasting weaker revenue.

Investors are also watching upcoming earnings reports, including results from Nvidia scheduled after Wednesday’s close.

Salesforce and Intuit are also set to report later in the week.

Federal Reserve policy expectations remain stable.

Traders largely expect the Fed to hold interest rates steady at its March meeting, with the next rate cut anticipated around June.

Investors also remained cautious ahead of Trump’s State of the Union address and comments expected from multiple Federal Reserve officials.

At least six Fed officials are scheduled to speak during the day.

As markets navigate tariff policy, AI disruption fears, and corporate earnings, investors remain cautious about near-term direction and volatility.