Stock Market Update

Market Overview

Equity futures indicate a flat opening after a challenging previous session where major averages closed over 1.0% lower. The S&P 500 has moved back into negative territory for the year, finishing below its 50-day moving average.

Concerns regarding AI disruption have negatively impacted the software sector, while the financial industry also faced pressures. However, Advanced Micro Devices (AMD) is trading sharply higher in premarket after a significant deal with Meta Platforms.

Key Developments

• A 10% global tariff goes into effect today, with reports suggesting a potential increase to 15%.
• President Trump is set to announce new utility cost requirements for technology companies during the State of the Union.
• FedEx has filed a lawsuit for a refund of tariffs.
• Home Depot reported better-than-expected earnings and raised its dividend.

International Market Activity

Asian markets showed mixed results, with South Korea's Kospi continuing its record run. The People's Bank of China maintained its loan prime rates, and China's Ministry of Commerce has banned dual-use exports to several Japanese companies.

In Europe, major indices are trading near flat lines, with Spain's IBEX underperforming after disappointing results from Standard Chartered.

Market Sentiment

Yesterday's trading session was marked by a broad "risk-off" tone, with significant losses in consumer discretionary and technology sectors. Defensive sectors like consumer staples and healthcare showed some resilience.

Overall, the market is experiencing volatility, particularly in the software and mega-cap tech sectors, amid ongoing concerns about AI disruption.