U.S. stock futures rebound slightly after sharp decline caused by tariffs and AI concerns

Investing.com - U.S. stock index futures rose slightly on Monday evening, after a sharp decline on Wall Street earlier due to the high uncertainty surrounding President Trump’s tariff policies and concerns over AI-driven disruptions in the software industry.

Uncertainty over escalating conflicts between the U.S. and Iran, as well as cautious investor sentiment ahead of Nvidia’s (NASDAQ: NVDA) upcoming earnings report this week, also pressured the markets.

As of 7:30 p.m. Eastern Time (00:30 Beijing Time), the S&P 500 futures were up less than 0.1%, at 6,855.0 points. Nasdaq 100 futures rose 0.1% to 24,781.0 points, while Dow futures increased nearly 0.1% to 48,873.0 points.

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FedEx sues the Trump administration for tariff refunds

FedEx (NYSE: FDX) filed a lawsuit against the U.S. government on Monday evening, demanding a “full refund” of emergency tariffs paid over the past year.

This lawsuit comes days after the U.S. Supreme Court ruled that these tariffs were illegal, and they are set to be canceled starting Tuesday at midnight.

FedEx is the first company to seek a refund following the Supreme Court’s decision and joins a large group of businesses challenging Trump’s tariffs legally.

However, the Supreme Court’s ruling did not specify how to handle the revenue collected from Trump’s illegal tariffs, estimated to exceed $160 billion.

Wall Street hit hard by tariff uncertainty and AI concerns

On Monday, major Wall Street indices fell over 1%, as uncertainty surrounding Trump’s tariffs and concerns about AI potentially disrupting the software industry led investors to adopt a risk-averse stance.

Ahead of Nvidia’s quarterly earnings report scheduled for Wednesday, market sentiment toward the tech sector remains weak. The company, the world’s most valuable, is widely seen as a barometer for AI demand and is expected to deliver strong profit growth compared to last year.

Following President Trump’s announcement of a 15% general tariff under another legal framework, market concerns about the future of Trump’s tariffs grew. A report by The Wall Street Journal also indicated that Trump is considering additional tariffs on at least six industries.

Although several countries that signed trade agreements with Washington over the past year are now seeking clearer explanations of their tariff policies, Trump is largely seen as sticking to his tariff agenda.

Trump also warned that if countries withdraw from recently negotiated trade agreements, higher tariffs could follow.

The S&P 500 fell 1%, while the Nasdaq Composite declined 1.1%. The Dow Jones Industrial Average led the decline, dropping 1.7%.

The technology sector continued to underperform, with fears of AI-related disruptive impacts intensifying, leading to a new round of selling in software stocks.

Part of the decline was related to a speculative report by Citrini Research, which outlined a hypothetical scenario set in June 2028, where AI disruption would trigger large-scale replacement of white-collar jobs.

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