U.S. stock futures declined on Tuesday, as investors assessed the recent updates regarding trade negotiations, marking the beginning of a historically weak month for equities. Futures for the Dow Jones Industrial Average declined by 265 points, representing a decrease of 0.6%. S&P 500 futures declined by 0.8%, while Nasdaq-100 futures experienced a loss of 1%. Investors realized gains on bull market outperformers as the unofficial conclusion of the summer season approached.

Nvidia shares experienced a decline of 1.5%. Palantir experienced a decline of 2%, leading the downward trend among major technology stocks. Investors were closely monitoring a rise in bond yields as September commenced. The 10-year Treasury yield increased to 4.29%, whereas the 30-year yield approached 4.98%. The recent actions follow a ruling by a federal appeals court on Friday, which determined that the majority of President Donald Trump’s global tariffs are unlawful. The U.S. Court of Appeals for the Federal Circuit ruled 7-4 that the power to impose broad levies resides solely with Congress. Trump characterized the decision as “Highly Partisan” and indicated his intention to appeal the ruling to the U.S. Supreme Court.

“A Supreme Court ruling against the use of IEEPA on reciprocal tariffs would reduce the risk of broad-based tariff escalation, which is market-positive,” stated Aniket Shah. “However, short-term uncertainty may increase as certain trade agreements may require renegotiation.” The recent developments may dampen sentiment as a new trading month commences. Historically, September has been the most challenging month for equities, as evidenced by the S&P 500’s average decline of 4.2% over the past five years, and a more than 2% drop on average over the last decade.

Adding to uncertainty are questions surrounding the future of Federal Reserve independence, particularly in light of the Trump administration’s attempts to remove central bank officials. A court hearing regarding the temporary barring of Trump from terminating Lisa Cook concluded on Friday without a ruling. This week, Stephen Miran, a nominee from the Trump administration, is set to appear before the Senate Banking Committee for his hearing on September 4. Wall Street has experienced a robust month in terms of stock market performance.

In August, the 30-stock Dow experienced an increase exceeding 3%. The S&P 500 experienced an increase of nearly 2%.  The tech-heavy Nasdaq concluded the month with a gain of 1.6%. The S&P 500 experienced its fourth consecutive month of gains. The significant event that market participants are anticipating is the publication of the jobs report for August on Friday, and its potential impact on the Federal Reserve’s interest rate decision scheduled for mid-month.