US stock index futures were unchanged as investors weighed US-China trade tensions, major bank earnings reports and remarks by Federal Reserve Chairman Jerome Powell.
The S&P 500 index fell 0.16% to 6,644.31, the tech-heavy Nasdaq fell 0.76% to 22,521.70, and the Dow Jones Industrial Average rose 0.44% to 46,270.46.
Markets were volatile after President Donald Trump last week threatened to impose 100% tariffs on Chinese goods in retaliation for Beijing's restrictions on rare earth exports.
US-China tensions have escalated as Trump severed trade ties with China in the cooking oil sector after he accused Beijing of refusing to buy US soybeans, calling the move “economic hostility.”
In addition, China targeted the US-linked unit of South Korean shipbuilder Hanwha Ocean by sanctioning five of its subsidiaries in response to a US investigation into China’s dominance of the shipbuilding industry.
The two countries have also imposed reciprocal investment fees on ships tied to each other, increasing maritime tensions in the protracted trade war.
In other developments, investors are now focused on Powell’s remarks on Wednesday at 12:20 midnight Malaysia time at the National Association for Business Economics (NABE).
Powell said the job and inflation outlook had remained stable since the September Fed meeting.
He stressed that the US economy was likely stronger than expected, but the labour market was starting to show signs of a slowdown.
Meanwhile, earnings from major US banks rose on Tuesday, with strong results but market reactions remaining mixed.
Goldman Sachs beat expectations on strong investment banking fees, while JPMorgan raised its annual net interest income forecast after a strong quarter.
Wells Fargo also posted a profit that beat expectations, supported by increased deal activity and strong credit performance.
The banking sector as a whole rose despite some stocks falling. On Wednesday, investors will turn to earnings reports from Bank of America, Morgan Stanley and other major banks.
