U.S. equity futures showed little directional momentum on Tuesday as market participants prepared for an earnings calendar that includes several high-profile reports. Investors entered the session with caution, centered on fears that developments in artificial intelligence might disrupt corporate earnings and business models across a range of sectors.
Market snapshot
By 03:03 ET (08:03 GMT), futures tied to the main U.S. indices were narrowly higher but essentially flat: the Dow futures contract was up 47 points, or roughly 0.1%, S&P 500 futures had added 10 points, or about 0.1%, and Nasdaq 100 futures had gained 38 points, around 0.2%. Those modest moves followed a slide in the primary Wall Street averages during the previous trading session, a decline market observers linked in part to renewed anxiety about AI-related disruption.
AI disruption fears cloud sentiment
Recent commentary and analysis suggesting that new AI models could create broad economic disturbances have unsettled investors. A report from Citrini Research presented a hypothetical scenario in which AI drives large-scale white-collar job losses, weakens consumer spending, increases loan defaults, and ultimately produces economic contraction. The authors of that analysis emphasized the document was a "scenario, not a prediction," a caveat that did not fully allay market unease.
Analysts at Vital Knowledge characterized the situation succinctly, noting that AI developments were acting as a drag on equities. Their note said hyperscalers - the large companies that have poured capital into AI infrastructure - are facing concerns about free cash flow, while worries about disruption have hit software firms and several other sectors. That combination, they argued, had turned AI into a net negative for equity markets in recent weeks.
Investors are therefore approaching upcoming corporate reports with a heightened sensitivity to disclosures about AI spending, margins and any indications that business models could be materially altered by new technology. Expectations and risk pricing in the market appear to be adjusting to the prospect that AI-related investments and competitive shifts could weigh on near-term cash flows across multiple industries.
Trump-era tariffs activated at 10%
Compounding market uncertainty, President Donald Trump’s new global tariffs became effective at a 10% rate at midnight on Tuesday, following a Supreme Court ruling that struck down his earlier, broader emergency-powers levies. The implementation was communicated through U.S. Customs and Border Protection messaging.
The 10% level is lower than the 15% rate the president announced after the court decision, which found his use of emergency economic powers to impose sweeping surcharges unlawful. Initially, a universal 10% tariff was declared, and the president later warned of a potential increase to 15% a day after the ruling. Press accounts indicate the White House is working on a formal order to raise the tariff to 15%.
Importantly, the current tariffs are being issued under Section 122 of the 1974 Trade Act and are time-limited. They will remain in place for 150 days, after which Congress must weigh in to determine their future. The ruling and ensuing policy shifts have left the status of trade accords negotiated by the administration unclear, prompting some trading partners to reassess whether prior arrangements remain intact. In response to such uncertainty, the president warned counterparts not to "play games."
M&A drama at Warner Bros Discovery
In media and streaming news, Paramount Skydance has reportedly submitted an improved bid for Warner Bros Discovery as it seeks to persuade the HBO Max owner to abandon an agreement with Netflix. Sources familiar with the matter said Paramount’s revised proposal increases its original $30-per-share offer, which equated to about $108.4 billion for Warner Bros as a whole. Warner Bros had said an earlier offer undervalued the company and gave Paramount a seven-day window until February 23 to file a revised bid.
Netflix meanwhile reached a separate agreement with Warner for its studios and streaming assets, a deal valued at $27.75 per share in cash, roughly $82.7 billion. Media reporting suggests Warner Bros is likely to at least review Paramount’s improved bid even as it canvasses shareholders to secure support for the Netflix transaction.
The outcome of the bidding contest will determine control over valuable intellectual property held by Warner Bros, including high-profile franchises such as "Game of Thrones" and "Harry Potter." Control of these properties is central to strategic positioning in the streaming and studio markets, where content ownership and distribution rights materially affect competitive dynamics.
Home Depot earnings in focus
Retail investors and analysts will also be watching Home Depot, which is scheduled to report quarterly results before the opening bell on Tuesday. The home-improvement retailer has previously issued underwhelming guidance for comparable sales and profit in its 2026 fiscal year, citing softer demand for big-ticket items.
At an investor day in December, the company’s finance chief, Richard McPhail, warned that consumer unease linked to cost-of-living pressures is expected to persist. He said there had not been "a catalyst or an inflection in housing activity," signalling management’s view that housing demand had not turned meaningfully upward.
Management attributes the choppy housing market to elevated home prices and muted hiring, even as interest and mortgage rates have shown some signs of easing. For fiscal 2026, Home Depot projected same-store sales growth in a flat to 2% band and forecast adjusted earnings per share to be flat to up 4% - guidance that sat below certain external expectations cited in recent reporting.
Oil edges toward seven-month highs
Commodity markets were also moving, with oil prices approaching levels not seen in roughly seven months ahead of another round of U.S.-Iran nuclear discussions. Brent futures rose 0.2% to $71.28 a barrel, while U.S. West Texas Intermediate futures climbed 0.3% to $66.51 a barrel. Both contracts were trading near price points last observed in early August 2025.
Iran and the U.S. are slated to hold a third set of nuclear talks on Thursday in Geneva. Market participants cited the negotiations and the potential geopolitical risks involved - including concerns about the prospect of military conflict - as factors supporting oil market strength.
Conclusion
Investors began the session in a cautious posture, balancing immediate corporate reporting risks with broader macro and policy developments. Anxiety about AI-driven disruption, a new but temporary round of global tariffs, an elevated-profile media takeover fight, and a fresh round of geopolitical-sensitive oil market drivers have combined to create a complex backdrop for the earnings season. Heightened attention on company disclosures in the days ahead is likely as markets look for clearer signals on how these intersecting forces may affect revenue, margins and capital spending plans.