US equity futures experienced a notable decline ahead of Tuesday's market opening as traders assessed the ramifications of US President Donald Trump's newly imposed tariffs on Canada, Mexico, and China. The Dow Jones Industrial Average futures saw a slip of 0.2%, while S&P 500 futures suffered a larger drop of 0.7%, and Nasdaq futures decreased by 0.8%.
The tariffs, impacting the top three trading partners of the United States, officially came into effect on Tuesday, prompting immediate market concerns. China wasted no time in responding with retaliatory tariffs, while Canada and Mexico are also anticipated to announce comparable measures, according to various media outlets. Furthermore, oil prices faced downward pressure, with the front-month global benchmark North Sea Brent crude dropping by 1.5% to $70.53 per barrel, and US West Texas Intermediate crude trading 1.2% lower at $67.54 per barrel. In terms of economic indicators, the light calendar featured a scheduled speech by New York Federal Reserve President John Williams at 2:20 pm ET, adding a layer of anticipation to the trading day. The global market landscape mirrored the volatility in the US, with Japan's Nikkei index closing 1.2% lower, Hong Kong's Hang Seng ending down 0.3%, while China's Shanghai Composite surprisingly finished 0.2% higher.
On the other side of the globe, the UK's FTSE 100 experienced a decline of 0.8%, and Germany's DAX index plummeted 2.7% during the early afternoon session in Europe. In the equity sphere, shares of Walgreens Boots Alliance saw a remarkable increase of 5.5% prior to the bell, spurred by reports from The Wall Street Journal that indicated the company was nearing the conclusion of a substantial $10 billion go-private transaction with private-equity firm Sycamore Partners.
Similarly, Okta stock soared by 14%, following the company’s announcement of stronger-than-expected fiscal Q4 non-GAAP earnings and revenue, coupled with a revelation that sales in the Amazon Web Services Marketplace surpassed $1 billion in total. Additionally, Sea Limited shares experienced a notable rise of 6.5% after the company reported a swing to profits in Q4 fueled by increased revenue. Conversely, several companies faced challenges, with KKR shares down by 4% after the announcement of a $1.50 billion offering of Series D mandatory convertible preferred stock.
GigaCloud Technology stock took a significant hit, plummeting 19% a day after revealing lower adjusted earnings for Q4. The trading day reflects the complexities of the current economic climate, emphasizing the interplay between political developments, market sentiment, and international responses..