HG MARKETS:

U.S. stock index futures dropped on Wednesday, indicating continued losses following Tuesday’s sell-off. The market remains weighed down by ongoing worries about the U.S. economy and escalating trade tensions. Investor sentiment was rattled further after Moody’s downgraded the U.S. credit rating last week. At the same time, Congress is preparing to vote on a significant tax cut proposal championed by President Donald Trump, adding to the uncertainty.

On the international trade front, investors are closely watching developments in negotiations between the U.S. and key global economies. Talks with Japan are set to resume this week, while discussions with other nations are also in progress. However, tensions escalated after China cautioned that U.S. restrictions on chip exports could jeopardize a recently achieved trade truce in Geneva.

Comments from multiple Federal Reserve officials highlighted continued concerns about economic and trade uncertainties. The Fed signaled that these issues reduce the likelihood of near-term interest rate cuts. Officials also noted that steep tariffs could increase inflationary pressures across the U.S.

Domestically, President Trump’s proposed tax cut and spending bill is facing pushback from some lawmakers. A key House vote scheduled for Wednesday will test whether Republicans can resolve internal disagreements. Analysts warn the bill could increase the national debt by $3 trillion to $5 trillion, further burdening the country’s already hefty $36.2 trillion debt load—one of the factors behind Moody’s downgrade.

On the earnings front, several major retailers are set to release results on Wednesday as the first-quarter reporting season wraps up. Lowe’s, Target, Canada Goose, and TJX will report before markets open, while cloud services firm Snowflake is set to report after the close.

These results come amid heightened tariff tensions that have led many consumer-focused companies to deliver cautious forecasts. Walmart recently warned of looming price hikes, while Home Depot stated it would maintain stable prices but acknowledged that tariffs might lead to shortages of certain products.