U.S. Stock Futures Fall After Record Highs, Powell and Musk Draw Trump’s Rage

U.S. stock futures edged lower on Tuesday, easing from record highs as investors weighed trade and fiscal policy headlines and positioned ahead of key labor market data due later this week.
At 06:00 ET (10:00 GMT), Dow Jones futures were down 28 points (-0.1%), S&P 500 futures fell 12 points (-0.2%), and Nasdaq 100 futures declined 52 points (-0.2%).

On Monday, all three major indices extended gains, with the S&P 500 and Nasdaq Composite closing at new all-time highs, up 0.5%, while the Dow Jones added 0.6%. Optimism has been supported by signs of easing trade tensions and expectations of near-term rate cuts from the Federal Reserve.

Trade Talks in the Spotlight

Investor attention remains focused on trade negotiations. A U.S.-China agreement last week and Canada’s last-minute decision to withdraw its planned digital services tax have raised hopes of further deals before President Trump’s July 9 tariff deadline.

However, talks with Japan have proven more difficult. According to The Financial Times, U.S. trade officials are now shifting toward limited, sector-specific deals to avoid the reimposition of reciprocal tariffs as high as 50%. These narrow agreements, while potentially sparing countries from the steepest levies, would maintain a baseline 10% tariff while broader negotiations continue.

Trump Pressures Fed Again

Expectations for Fed rate cuts have strengthened following softer-than-expected inflation data. The central bank held rates steady at 4.25%–4.5% in its latest meeting, with Chair Jerome Powell adopting a cautious tone given uncertainty around Trump’s tariff strategy.

President Trump renewed his criticism of Powell on Monday, sending a handwritten note urging deeper rate cuts and sharing global comparisons of borrowing costs. In a social media post, Trump said the U.S. should be paying “1% interest or better,” and hinted at potentially naming a successor to Powell later this year—raising concerns about a possible “shadow chair” undermining the Fed’s independence.

Markets currently price in over a 90% probability of a rate cut in September. This week’s economic data, especially Thursday’s official jobs report, could influence that outlook further.

Senate Moves Forward on Tax Bill

The Senate advanced debate over Trump’s sweeping “One Big Beautiful Bill,” which bundles tax cuts, domestic spending reforms, and border security measures. A narrow 51–49 vote on Saturday opened the floor to discussion.

According to the Congressional Budget Office, the Senate’s version would add $3.3 trillion to the federal deficit over the next decade. The bill includes a $5 trillion debt ceiling increase—$1 trillion more than the House version. Lawmakers aim to finalize the legislation before the July 4 holiday, but failure to do so could push the Treasury toward a summer deadline and risk a potential default.

Tesla Falls Amid Trump–Musk Clash

Tesla shares declined in premarket trading after President Trump intensified criticism of CEO Elon Musk, accusing him of excessive reliance on federal subsidies. Trump suggested that the Department of Government Efficiency (DOGE) investigate Tesla’s federal support, stating Musk may have received “more subsidy than any human being in history.”

The conflict appears tied to Musk’s recent opposition to Trump-backed tax legislation currently under Senate review.

Oil Prices Decline on Supply Outlook

Crude prices dipped to three-week lows early Tuesday amid easing supply concerns and expectations of further output increases by OPEC+.

At 06:00 ET, Brent crude futures were down 0.2% at $66.60 per barrel, while WTI dropped 0.2% to $64.97. Brent earlier touched its lowest level since June 11, prior to the Israel–Iran conflict.

OPEC+ is set to meet on July 6, with Reuters reporting plans to boost output by 411,000 barrels per day in August—extending increases from the prior three months. The cumulative rise would bring total 2025 additions to 1.78 million barrels per day, though still trailing the scale of earlier production cuts.