Nasdaq Futures Falling Amid Tariff and Tech Concerns

The Nasdaq futures are trending down, with the September Nasdaq 100 E-Mini futures (NQU24) falling by -1.04% this morning. This decline can be attributed to a combination of factors, including tariff uncertainties and concerns about Big Tech spending. Let's delve into the details and explore the potential implications for investors.



Alphabet's cautious outlook on AI progress and Tesla's profit miss, coupled with a delay in its Robotaxi event, have weighed on investor sentiment. Alphabet's shares fell more than -3% in pre-market trading after the tech giant reported higher-than-expected Q2 capital spending, with its chief indicating that patience will be required to see concrete results from artificial intelligence investments. Tesla slumped over -7% in pre-market trading after reporting weaker-than-expected Q2 adjusted EPS and postponing its Robotaxi event to October.



The broader market sentiment has been damaged by the unpredictability of President Donald Trump's trade proclamations, according to analysts. Kathleen Brooks, research director at XTB, noted that "Risk appetite continues to dwindle this week...There is too much uncertainty which is eroding the foundations of a broad-based stock market rally as we move through February. The two big themes driving markets right now are earnings reports and the threat of tariffs, which are tricky for investors to navigate."

As investors gear up for Friday's jobs report, data showed employment at US companies picked up in January by more than forecast, highlighting resilient labor growth despite mounting uncertainty. Federal Reserve officials are closely tracking developments in the jobs market as they assess how much to lower interest rates this year. A rapid pickup in the unemployment rate last summer was a key driver behind policymakers' decision to lower rates by a full percentage point in 2024. However, the job market has shown renewed strength since then, with Fed Chair Jerome Powell describing it as "strong."



U.S. rate futures have priced in a 4.7% chance of a 25 basis point rate cut at next week's monetary policy meeting and a 91.7% probability of a 25 basis point rate cut at the September meeting. In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.241%, up +0.05%.

In conclusion, the Nasdaq futures are falling amid tariff uncertainties and concerns about Big Tech spending. Investors should be prepared for choppy market conditions and consider diversifying their portfolios to mitigate risks associated with these factors. As the earnings season rolls in, investors should closely monitor the performance of tech companies and assess the potential long-term implications for the Nasdaq's performance.