Dow futures traded flat on Tuesday, reflecting cautious optimism among investors ahead of key market events this week, including Federal Reserve interest rate decisions and major tech earnings reports.
A wave of optimism continues on Wall Street as investors are expecting a positive outcome from the upcoming meeting between US President Donald Trump and Chinese President Xi Jinping.
But, multiple uncertainties still remain around the ongoing US government shutdown and related delay in crucial economic data.
5 things to know before Wall Street opens
1. The US government shutdown has now stretched into its fourth week, and it’s becoming a serious overhang for the markets.
The standoff in Congress over funding has left hundreds of thousands of federal workers furloughed and caused delays in key government services, none of which helps confidence in the economy.
Investors are watching the political back-and-forth closely. A deal to reopen the government could give markets a lift, especially during what has already been a choppy earnings season.
But if the gridlock drags on, it could weigh on sentiment and add another layer of risk to an already nervous market environment.
2. The investors are now waiting on the Federal Reserve’s meeting on Wednesday. The market is expecting clues about where interest rates might be headed, especially with economic data sending mixed messages and inflation still not fully tamed.
The general expectation is that the Fed will stay cautious, trying to keep inflation in check without hurting growth.
If the Fed leans hawkish or hints at more tightening, that could pressure stocks, especially in sectors that are sensitive to higher rates. On the flip side, if policymakers strike a more dovish tone, that could keep the market rally going.
In short, whatever the Fed says next is likely to play a big role in shaping investor mood during this already intense earnings season.
3. In premarket trading on Tuesday, UPS was one of the standout movers. The stock jumped about 12% after the company crushed expectations with third-quarter earnings of $1.74 per share versus the $1.30 forecast, and revenue came in strong at $21.4 billion.
Qorvo also popped more than 10% after reports surfaced that Skyworks Solutions had held talks to acquire the company, in a potential deal valuing the combined group at roughly $22 billion.
PayPal saw a major move, ticking up about 13% ahead of its own earnings report.
4. Amazon made headlines Tuesday after announcing plans to cut around 14,000 corporate jobs, with the number potentially reaching as high as 30,000 by the end of the year.
That’s close to 10% of its 350,000 corporate employees, the biggest round of layoffs since late 2022.
CEO Andy Jassy said the move is part of an effort to streamline the company and stay competitive in the race for AI, trimming layers of bureaucracy while pouring more resources into AI infrastructure and data centers.
Interestingly, Wall Street reacted positively.
Amazon’s stock rose about 1.23% following the news, as investors viewed the cuts as a sign of disciplined cost management and confidence in the company’s AI strategy.
5. Global markets pulled back on Tuesday, after recently hitting record highs, as investors locked in some gains ahead of major events later in the week.
Japan’s Nikkei 225 slipped 0.58% to 50,219, and South Korea’s Kospi dropped 0.80% even though its GDP numbers beat expectations.
China’s Shanghai Composite was the outlier, inching up 0.28% on optimism around a possible US–China trade deal ahead of Donald Trump’s meeting with Xi Jinping in South Korea on Thursday.
Europe also took a breather after a strong run. The Stoxx 600 dipped 0.32% following three straight record closes.
The FTSE 100 was basically flat, up just 0.01%, while Germany’s DAX edged down 0.14% and France’s CAC 40 slipped 0.2%.
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