Investing.com - U.S. stock futures edge down, with markets eyeing the prospect of future U.S. trade agreements. No deals are set to come out of a Group of Seven finance ministers meeting in Canada this week, according to Reuters, but reports say the U.S. and Japan will hold talks in the coming days. President Donald Trump’s tariff agenda will likely play a central role in Home Depot (NYSE:HD)’s latest earnings, particularly after Walmart (NYSE:WMT) noted that it would probably soon raise prices because of the levies.
1. Futures lower
U.S. stock futures ticked lower on Tuesday after investors widely shrugged off a Moody’s U.S. credit downgrade in the prior session and hoped for more trade agreements from the Trump administration.
By 03:27 ET (07:27 GMT), the Dow futures contract had slid by 75 points, or 0.2%, S&P 500 futures had dropped by 20 points, or 0.3%, and Nasdaq 100 futures had fallen by 95 points, or 0.4%.
The main averages on Wall Street closed higher on Monday, rebounding from an initial dip following Moody’s credit rating slash late last week. U.S. Treasury yields eased back somewhat from an initial jump, but remain at elevated levels.
“Stock[s] are still riding on the momentum from last week’s ’Big 3’ sources of bullish news (tariff de-escalation with China, cool U.S. inflation data, and healthy April-end earnings) and nothing happened Monday to derail that trend,” analysts at Vital Knowledge said in a note to clients.
2. No trade deals expected at G7 meeting - report
The U.S. Treasury Department does not expect to reveal any trade deals at a meeting of Group of Seven finance ministers in Canada this week, Reuters has reported.
Citing a source briefed on the gathering, the Treasury Department will also not agree to a joint communique unless it serves their interest.
Treasury Secretary Scott Bessent is due to speak with Japanese counterparts at the meeting in the Canadian province of Alberta, the news agency reported. Trade talks between Japan and the U.S. are set to take place later this week, in the third round of high-level discussions between the nations, Japan’s Kyodo News agency reported on Tuesday.
Since the announcement of an agreement between the U.S. and China last week, investors have been eagerly awaiting more trade developments. Trump previously delayed harsh tariffs on most countries, but the clock is ticking towards the end of that pause in July.
Bessent will also push allies at the G7 to take steps to combat the spillover effects of non-market economies like China, a Treasury spokesperson told Reuters. U.S. officials, including Bessent’s predecessor Janet Yellen, have argued that China has threatened jobs in market economies by flooding the world with cheap goods.
3. Home Depot reports
On the earnings calendar, investors are assessing results from Home Depot.
The group reported first quarter fiscal 2025 results that exceeded revenue expectations but fell short on earnings, while reaffirming its full-year outlook. The stock rose 2.2% in premarket trading following the announcement.
The world’s largest home improvement retailer posted revenue of $39.86 billion, surpassing analyst estimates of $39.25 billion and representing a 9.4% increase year-over-year. Adjusted earnings per share came in at $3.56, compared with the consensus estimate of $3.59.
Comparable sales decreased 0.3% overall but rose 0.2% in the U.S. Foreign exchange rates negatively impacted total company comparable sales by approximately 70 basis points.
Meanwhile, Bloomberg News reported that the retailer’s CFO said the company won’t raise prices due to tariffs. Any commentary from the company on its pricing strategy will potentially be under close scrutiny, especially after peer Walmart said last week that it would likely hike prices soon due to cost pressures from Trump’s aggressive levies.
4. China slashes lending rates
China cuts its benchmark lending rates for the first time since October and major state banks brought down their deposit rates, as Beijing pushes to ease monetary policy to help support the country’s ailing economy.
The People’s Bank of China announced that its one-year loan prime rate, a key metric used by banks, had fallen by 10 basis points to 3.0%. The five-year rate, which is a major factor in determining home mortgages, dipped by the same amount to 3.5%.
Although the step was widely anticipated, analysts viewed the relatively limited size of the drawdowns as an indication of potential wariness among policymakers currently attempting to negotiate uncertainties around U.S. tariffs.
Last week, Washington and Beijing agreed to bring down their tit-for-tat levies and delay the duties until August. However, universal 10% tariffs remain in effect, as well as 20% levies linked to China’s alleged role in the flow of the illegal drug fentanyl into the U.S.
5. Oil prices inch lower
Oil prices traded lower as traders digested signs of a faltering U.S.-Iran nuclear deal, while the prospects of negotiations toward a Russia-Ukraine ceasefire weighed on the sentiment.
At 03:28 ET, Brent futures had dropped by 0.6% to $65.16 a barrel, and U.S. West Texas Intermediate crude futures had declined by 0.6% to $61.75 per barrel.
Iran on Monday reaffirmed that its uranium enrichment program is “absolutely non-negotiable,” a stance that continues to be a sticking point in nuclear negotiations with the United States. A successful agreement could lead to the easing of sanctions and an increase in Iranian oil exports, impacting global energy markets.
Investors are also monitoring the conflict in Ukraine closely, as a resolution could impact energy markets and geopolitical stability. Following a phone call with Russian President Vladimir Putin on Monday, Trump said Russia and Ukraine had agreed to immediate ceasefire talks. However, the Kremlin flagged that such talks would take time, while Trump indicated that he would not be willing to join some European countries in putting pressure on Moscow through fresh sanctions.