Wall Street Set for Cautious Start Amid Trade Tensions

Highlights:

• At the time of writing, S&P 500 futures were down 0.5%, with Nasdaq and Dow futures also pointing to slight declines.
   
• Investor sentiment remains cautious as President Donald Trump signals that further delays to tariff hikes are unlikely.
   
• Hopes for a potential Federal Reserve rate cut later this year helped US stocks post their longest winning streak in three months last Friday.

US Futures Point to a Lower Open

At the time of writing, S&P 500 futures were down by 0.5%, while futures tied to the Nasdaq and Dow Jones Industrial Average were also signaling slight losses. Investors are approaching the new trading week carefully, awaiting developments in global trade negotiations that could impact market sentiment.

Trade Talks Remain in Focus

Market participants are closely monitoring any updates on US trade relations after President Donald Trump indicated that another delay in raising tariffs on trade partners was unlikely. This statement has added to uncertainty around the potential for any short-term resolution, keeping traders wary at the start of the week.

Fed Policy Expectations Support Sentiment

Despite the cautious mood, Friday's session saw US equities notch their longest winning streak in three months. Growing speculation that the Federal Reserve might move to cut interest rates again in the first half of this year has helped support optimism. Signs of a slowing American economy have fueled expectations that the central bank could step in with additional easing measures if needed.

Looking Ahead

Investors will be closely watching for further clarity on trade negotiations and any economic data that could influence the Federal Reserve's next move. Until then, volatility is likely to persist as markets respond to political and economic headlines.

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