Stock futures slumped after Trump’s weekend tariff tantrum added uncertainty to American trade policy and was another blow to bullish outlooks for 2026. The Supreme Court’s tariff ruling means a big source of fiscal revenue from 2025 may have to be refunded (although if it is refunded to US consumers, who bore the brunt of tariffs as most liberals analysts concluded, it would represent a huge pre-midterm stimulus). As of 8:00am ET, S&P futures were 0.5% lower, giving up almost all Friday gains, while Nasdaq 100 contracts sliding -0.6%. In pre-market trading, there is a defensive tone as Mag7 names are mostly lower, Semis are coming for sale (NVDA flat ahead of earnings on Wednesday); and, most sectors are seeing weakness with pockets of positive performance in HC, Aero/Def, Materials, and Utilities. “We started 2026 with a bullish outlook — but not even two months into the year, many of our assumptions are being challenged,” wrote the Bloomberg Economics team led by Anna Wong. The risk of war in Iran and the AI scare are also denting optimism. The dollar recouped losses while bond yields are flat-to-down 1bp after spiking on Friday on fears the SCOTUS ruling will unleash much more debt issuance. Commodities are seeing weakness in Energy with WTI down 60bp, Ags being sold perhaps on lower tariffs, and precious metals maintain their incessant bid. Today we get factory orders and the final December durable goods report. Key events this week include Trump’s State of the Union Address tomorrow, Nvidia earnings on Wednesday and PPI data on Friday.

In premarket trading, Magnificent Seven are mostly lower, with the lone exception being GOOGL which rises 0.3% as Wells Fargo upgrades to overweight, calling the search giant an “AI winner.” Others are all down (Nvidia -0.2%, Microsoft -0.5%, Apple -0.5%, Meta Platforms -0.7%, Amazon -0.9%, Tesla -0.9%)

In corporate news, Honeywell slashed its price to acquire Johnson Matthey’s Catalyst Technologies business in a move to save the deal from falling apart. OpenAI is projecting that its revenue will grow at a fast clip in the next few years and exceed $280 billion in 2030, according to a person familiar. Hynix pledged to boost output of AI memory chips to meet a surge in demand.

The latest questions over tariffs following the SCOTUS rejection of Trump's signature trade policy are giving traders another focal point in markets that have been grappling with concerns about artificial intelligence and tensions in the Middle East. Investors will also closely follow Trump’s State of the Union address on Tuesday and Nvidia Corp.’s earnings the following day.

“Markets quickly realized that the ruling might not change much in the near term and will rather increase uncertainties,”said Stephan Kemper, chief investment strategist at BNP Paribas Wealth Management. “Donald Trump is not known to avoid a fight or give up easily.”

Trump responded to the ruling by imposing a new 10% global levy, vowing to use other powers to maintain his signature trade policies. He upped that to 15% the next day. US Trade Rep Jamieson Greer said the tariff-policy defeat won’t unravel individual deals the administration has sealed with trading partners. Still, the EU is poised to freeze the ratification process of its deal with the US and is seeking more details from the Trump administration. However, senior US officials, including Trade Representative Jamieson Greer, signaled over the weekend that the court decision wouldn’t unravel agreements already negotiated.

“The question is about the benefit of the rebates versus the extra uncertainty that the trade issues are causing, and for me the latter wins,” JPMorgan Asset Management Global Market Strategist Hugh Gimber told Bloomberg TV. “That for me risks putting business activity on hold, because companies simply don’t know what’s to come further down the line.”

For JPMorgan strategists, an equity-market pullback driven by global tariff policies or an escalation in Iran could create dip-buying opportunities as long as the macro backdrop remains positive. “Adverse geopolitical headlines” could lead to de-risking given the recent rally and stretched technicals, wrote the team led by Mislav Matejka. “But we believe that these will not be long-lasting, and should be seen as buying opportunities.”

Meanwhile, the hunt for AI losers (and winners) continues in both public and private markets. Today’s Big Take looks at the fallout in private credit after Blue Owl, a prominent software lender, permanently shut the gates on one of its funds.The biggest AI event this week comes in the form of Nvidia results.Still, the chip giant’s stock is stuck in a range and even blowout earnings may not lift it according to Bloomberg.

"We started 2026 with a bullish outlook — but not even two months into the year, many of our assumptions are being challenged,”wrote the Bloomberg Economics team led by Anna Wong. The Supreme Court’s tariff ruling means a big source of fiscal revenue from 2025 may have to be refunded. The risk of war in Iran and the AI scare are also denting optimism.

Source: ZeroHedge News