By Lisa Pauline Mattackal and Purvi Agarwal
(Reuters) -U.S. stocks were on track to recover on Tuesday, with investors turning their focus to corporate earnings after President Donald Trump’s mounting criticism of Federal Reserve Chair Jerome Powell caused a sharp selloff in the previous session.
All three major indexes ended Monday’s session more than 2% lower after Trump redoubled his attacks on Powell for not cutting interest rates, sparking concerns about the central bank’s autonomy and the future monetary policy path.
The mood remained fragile as investors awaited Trump’s next steps vis-à-vis Powell. Clarity on U.S. tariff policy and the outcome of negotiations with individual countries on reciprocal levies are also in focus.
Investors had a slew of earnings to sift through on the day, with dozens more due through the week, for indications on how companies are navigating the uncertainty caused by tariffs and their expectations for a hit to future earnings.
“There’s still a lot of uncertainty in the air with where tariffs will land… but if we can look past that, the fundamentals in the markets still look very good,” said Eric Sterner, CIO for Apollon Wealth Management.
“Earnings are expected to grow 10% for this first quarter, so corporate profits are still very healthy.”
Shares of industrial conglomerate 3M Co jumped 6.9% in premarket trading after the company beat first-quarter profit expectations, though it flagged a likely hit to 2025 profit from tariffs.
Verizon fell 5.8% after posting a higher quarterly subscriber loss, while Northrop Grumman slumped 8.8% after it reported a sharp drop in profit.
At 08:35 a.m. ET, Dow E-minis were up 339 points, or 0.88%, S&P 500 E-minis were up 44.75 points, or 0.86%, and Nasdaq 100 E-minis were up 166.75 points, or 0.93%.
Tesla, which will kick off earnings for the “Magnificent Seven” group of megacap stocks after markets close, rose 1% in premarket trading.
Josh Gilbert, market analyst at eToro, said investors are looking for clarity on the impact of auto tariffs as well as Tesla top boss Elon Musk’s advisory role in the Trump administration and the rollout of cheaper EVs.
Other megacap stocks, among the hardest hit by Monday’s selloff, also recovered. Nvidia added 1.3%, Amazon.com was up 1.1% and Apple gained 0.8%.
First Solar gained 7.2% after U.S. trade officials finalized steep tariff levels on most solar cells from South Asia.
Indexes have fallen sharply this year as Trump’s erratic trade policies rattled markets, with the S&P 500 16% below its February 19 record closing high.
A close 20% below that mark would confirm that the index has entered a bear market. The Nasdaq Composite confirmed it was in a bear market earlier this month.
Commentary from five Fed speakers including Vice Chair Philip Jefferson is expected through the day. Their remarks will be closely watched for clues on the central bank’s policy outlook and view on rising tensions with the White House.
Meanwhile, Trump’s legal ability to fire the Fed chair remains unclear.
(Reporting by Lisa Mattackal and Purvi Agarwal in Bengaluru; Editing by Pooja Desai)
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