US stock futures were softer in early trading on Tuesday as major index contracts dipped ahead of two headline catalysts: President Donald Trump’s State of the Union address and quarterly earnings from Nvidia, the largest AI‑focused chipmaker by market capitalization. Futures trading reflected investor caution as markets tried to balance positive momentum from the prior session with uncertainty around policy signals and corporate performance.

This positioning comes after a rebound on Wall Street on February 24, when the Dow Jones, S&P 500 and Nasdaq showed broad strength after recent volatility related to trade rhetoric and AI fears eased.

Futures Reaction: Policy and Earnings Corner Markets

Contracts on the major US equity indices were modestly lower Tuesday as traders awaited the State of the Union address by President Trump, scheduled for the evening. The political event could shape investor expectations around economic policy and trade, influencing corporate profitability and capital expenditure. Cautious positioning in futures markets suggests that investors are hedging exposure ahead of potential announcements regarding tariffs, fiscal priorities, or regulatory approaches.

Simultaneously, Nvidia’s quarterly earnings report has become one of the most anticipated events on the corporate calendar, given its outsized influence on technology and AI segments. Analysts are watching for not just top‑line and bottom‑line results but also guidance on data‑center demand and product lines tied to AI workloads, which have been central to equity performance and broader sentiment throughout 2026. The dual focus on policy and earnings underscores how macro and micro catalysts are converging in a compressed time window.

Market Context: Wall Street Rebound and Sector Rotation

The softer futures contrast with a strong rebound on February 24, when major indexes climbed after a recent sell‑off. The S&P 500, Dow and Nasdaq all posted gains as risk‑assets rallied, with technology and cyclicals benefiting as concerns about AI disruption moderated. This rebound followed a period of elevated volatility driven by tariff uncertainty and tech sector pressure, highlighting how quickly sentiment can shift as headlines evolve.

Despite the rebound, breadth measures and sector rotations suggest that investors are still discerning risk exposures: defensive sectors have seen intermittent inflows, while growth and tech names exhibit sensitivity to earnings expectations. Nvidia’s report looms especially large for the tech landscape, as its results are widely viewed as a proxy for enterprise and hyperscaler demand trends that drive spending across cloud and AI infrastructure.

Broader Economic Considerations and Global Influence

Beyond the US political and corporate calendars, broader macroeconomic indicators and global markets are influencing sentiment. Central bank guidance, labor data, and inflation metrics continue to shape expectations around interest rate trajectories and liquidity conditions. Policy signals from Trump’s address could also resonate with global fixed‑income and FX markets, adding another layer of potential market impact.

International investors, including those in Israel allocating capital to US equities or sector funds, are likely monitoring these developments closely, given the integrated nature of global markets and the role that policy shifts can play in risk pricing.

What to Watch Next: Catalysts and Risks in the Near Term

Looking ahead, market participants will focus on the content and tone of the State of the Union address, seeking clues on trade policy, fiscal initiatives, and regulatory priorities that could influence corporate earnings outlooks. Nvidia’s earnings release will be a critical data point, especially if guidance deviates from consensus expectations. Volatility measures, sector rotation patterns, and post‑earnings reactions across the technology complex will be key indicators of risk appetite. Traders should also monitor liquidity conditions and cross‑asset flows as markets balance macro uncertainty with corporate newsflow in what could be a decisive period for sentiment direction.