US futures

Dow future -0.24% at 44347

S&P futures -0.37% at 6043

Nasdaq futures -0.60% at 21612

In Europe

FTSE -0.18% at 8764

Dax  022% at 21985

• Powell will testify shortly before Congress
• Trump’s steel & aluminium trade tariffs begin March 4
• Coca-cola rises 3% after beating estimates
• Oil rises for a third straight day

Risk assets appear desensitised to trade tariff announcements

US stocks point to a modestly lower start on Tuesday amid a cautious mood as investors await Federal Reserve chair Jerome Powell’s semi-annual testimony before Congress.

The market will look for Powell's insights on tariffs and their impact on inflation in the world's largest economy. Tomorrow Powell will have the opportunity to comment on the inflation data, which will be released ahead of his second testimony. It's unlikely that Powell will adopt a more dovish stance in light of sticky inflation and a solid jobs market. Powell's testimony could be neutral to modestly negative for stocks.

So far, the Fed has avoided commenting on the implications of the new administration's trade and immigration policies. However, as more measures are announced, the Fed will build a clearer picture of these policies and their potential impacts.

Heading to Powell's testimony, the markets are pricing in a 25-basis-point Fed rate cut and a 60% chance of another this year.

Trump announced a 25% trade tariff on steel and aluminium imports, which will take effect on March 4. Shares of steelmakers and aluminium producers are rising pre-markers.

Corporate news

Coca-cola is rising after beating expectations for Q4 earnings and revenue. The drinks maker posted EPS of $0.55 ahead of the $0.52 expected on revenue of $11.54 billion versus $10.68 billion expected. The beverage giant posted net sales growth of 6% for the quarter amid rising demand for its drinks.

Shopify is falling over 3.5% premarket after the e-commerce company disappointed with its Q1 profit outlook even after posting stronger-than-expected holiday quarter sales thanks to healthy consumer spending and its rollout of AI features.

Marriott International is falling 2% premarket after the hotel operator’s forecast for 2025's profits fell below expectations amid poor performance in its hotels in Greater China.

S&P 500 forecast – technical analysis.

The S&P 500 once again found support on the 50 SMA yesterday before recovering higher. This dynamic support has been tested on several occasions in recent weeks. While the price remains above the 50 SMA, buyers could look to rise towards 6100 and 6130 to fresh record highs. However, a break below the 50 SMA at 6000, as well as the psychological level, could open the door to 5915, the 100 SMA, and the February low. A break below here is needed to create a lower low.

FX markets – USD falls, GBP/USD flat

USD is falling modestly ahead of Powell’s testimony, which could provide further clues over the outlook for monetary policy as Trump ramps up trade tariffs.

EUR/USD is rising above 1.03 in cautious trade. Gains in the EUR could be limited given worries surrounding trade frictions after EC President Ursula von Der Leyen warned of retaliatory tariffs. ECB President Lagarde sees the disinflationary process continuing, but trade frictions make the inflation outlook uncertain.

GBP/USD is holding steady against a weak USD, but is falling against the EUR. BoE hawk-turned-dove Catherine Mann said she saw inflation returning to target next year due to a weaker demand picture. BoE Governor Bailey will speak this afternoon.

Oil rises for a third day

Oil prices are rising for a third straight day despite trade worries. Oil has risen 3% over the past 2 days alone, recovering some of last week's losses.

There is still a lot of uncertainty surrounding trade tariffs, which hurt risk sentiment and spilled over into the oil markets last week. However, we are seeing an appetite to buy the dip.

Meanwhile, Russian production is dipping below its OPEC plus quota at 8.962 million barrels per day in January, almost half the 16,000 barrels expected. Whilst small, this shortfall is easing oversupply fears and helping bullish sentiment. While supply constraints persist crude oil could continue rising although economic indicators and tariff developments could create headwinds.

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