Market Report

UK and European stocks hovered just below the flatline as investors continued to monitor developments in U.S. trade policy under newly inaugurated President Donald Trump.

US stock futures were mixed as investors assessed China's instant retaliation to US President Donald Trump's additional tariffs amid worries about the risk of a trade war.

Crude prices were steady as U.S. tariffs on China took effect and Beijing retaliated with its own tariffs, heightening trade war fears, while U.S. President Trump delayed a decision on imposing steep levies on Canada and Mexico for a month.

Gold prices were also steady after a record rally in the previous session, with investors cautious about the potential effects of President Donald Trump’s tariffs and ahead of the U.S. economic data set to be released later this week.

In the corporate space, shares in music streaming giant Spotify were up double-digits ahead of the bell on Tuesday after its Q4 earnings beat revenue expectations and it reported its first full-year profit, while PepsiCo fell short of estimates with its latest quarterly revenue performance, and Estee Lauder said Q2 gross profits had fallen 2% on the back of a 6% decline in net sales.

Still to come, Google parent company Alphabet was slated to report earnings after the close.
On the macro front, new orders for goods manufactured in the US sank 0.9% month-on-month to $578.5bn in December, according to the Census Bureau, extending November's revised 0.8% drop and missing market expectations for a smaller 0.7% decline.

Transportation goods orders were down 7.4% to $86.14bn due to a plunge in non-defence aircraft orders.