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Stock futures edged down early Tuesday following two consecutive winning sessions that offered a reprieve from the market’s recent sell-off.Dow Jones Industrial Average futures fell 99 points, or 0.2%, while S&P 500 futures dipped 0.3%. Nasdaq 100 futures lost 0.5%.Those moves follow a second-straight winning session on Wall Street. That marks a turn after several tough weeks on Wall Street as some soft economic data and President Donald Trump’s on-again-off-again tariff policy left investors wary of the U.S.’ financial health.Tesla, one of the stocks hardest hit during the market’s recent correction, was down yet again on Tuesday. The stock fell more than 3% in the premarket after RBC Capital Markets lowered its price target on the electric vehicle name, citing rising competition in the EV space. It’s fallen nearly 33% over the past month.The S&P 500 officially entered correction territory last week, but the index has made up some notable ground in the recovery rally seen in Friday’s and Monday’s sessions. Despite the recent bounce, the tech-heavy Nasdaq Composite still sits in a correction, a term used to describe an index falling at least 10% from a recent high. The three major averages all remain down on the year, underscoring the strength of the market’s pullback.While investors continue to follow updates out of the White House, they’ll turn their attention to the Federal Reserve two-day policy meeting that kicks off Tuesday.Traders will closely follow Wednesday afternoon’s interest rate announcement and subsequent press conference with Fed Chair Jerome Powell. Fed funds futures are pricing in a 99% likelihood that the central bank holds rates steady, according to CME’s FedWatch tool.“We had two distinct stages to what was the fifth fastest correction since World War II: The first one was a good old growth scare, then we had pretty nasty technicals,” said Mohamed El-Erian, chief economic advisor at Allianz. “Most of the bad technicals are behind us. So the two questions going forward is: Will the growth scare be contained? And will the hope in the Fed put prove realistic or not?”Before Wednesday’s rate policy announcement, investors will monitor economic data on imports, housing, building and production due Tuesday morning. There are no major earnings reports expected on Tuesday.Barclays downgrades PepsiCo to equal weight from overweightBarclays downgraded shares of PepsiCo to an equal weight rating from overweight on Tuesday, citing mounting pressure against the company’s U.S. food business as a reason.With the U.S. food business accounting for 30% of Pepsi’s sales and 47% of its profits, analysts have been viewing Pepsi increasingly more as a U.S. packaged food company rather than a multi-national snacks and beverage company, Barclays wrote.“As such, investors have largely looked past the constructive international story that emerged in recent years, and negative sentiment has instead been fully driven by the faltering of Frito-Lay North America,” analyst Lauren Lieberman added. “Therefore, the ability for PEP shares to re-rate higher is (rightly or wrongly) all about the fate of the US snacking business, and we are of the view there remains a heavy lift in order to shore up FLNA. What’s more, looking past the initial rebuild of FLNA, we see less upside inherent in sales and profit growth longer term compared to our outlook a few years ago when we upgraded PEP to Overweight.”Lieberman accompanied the downgrade by lowering her price target to $156 from $168. This revised price forecast is just 3% above where shares of Pepsi closed on Monday afternoon.Pepsi’s stock has slipped 12% in the past 12 months.— Lisa Kailai HanBaidu shares rise following release of AI modelsBaidu shares rose more than 2% in the premarket on Tuesday, extending its 9% gain from the previous session.The gains come on the heels of the Chinese tech giant releasing two new artificial intelligence models on Sunday, one of which the company claims rivals DeepSeek’s R1 model.The stock has significantly outperformed the broader market in 2025, seeing a more than 21% jump year to date through Monday’s close.— Sean Conlon, Dylan ButtsMorgan Stanley upgrades Lucid Group to equal weight on emerging AI strategyMorgan Stanley analyst Adam Jonas upgraded electric vehicle manufacturer Lucid Group to an equal weight rating from underweight in a Monday note, citing a potential executable AI strategy.Jonas left his price target for the stock unchanged at $3. This represents a nearly 39% upside from Lucid’s Monday closing level of $2.16. Shares of Lucid have tumbled more than 28% this year.But going forward, Jonas believes that a new leadership team and its emerging AI strategy could boost the stock higher.“Following the announced/ongoing changes in leadership, we believe Lucid has opportunity to execute an AI strategy leveraging strategic/sovereign partnerships within the context of the urgency to develop onshore manufacturing capacity for BEVs [battery electric vehicles] as the ‘socket’ for the AI ‘brain,’” he wrote.Jonas added: “We see emerging scope for Lucid’s ability to play a role in the embodied AI theme as an reshored/’friend-shored’ manufacturer with access to capital and strategic relationships that uniquely position Lucid to straddle geopolitical hurdles in potentially partnering with both China and the West.”— Lisa Kailai HanAsia-Pacific markets rise as Hong Kong tech stocks rally; Baidu shares pop 12%Asia-Pacific markets rose on Tuesday, tracking gains on Wall Street, which ticked up after U.S. retail sales data appeared to ease recession concerns.Hong Kong’s Hang Seng Index led gains in Asia, rising 2.29% in its last hour on the back of strong moves in tech giants like Baidu, which was up 12.11% as at 3.45 p.m. local time.Meanwhile, mainland China’s CSI 300 advanced 0.27% to end the day at 4,007.72.Japan’s benchmark Nikkei 225 ended the day 1.20% higher at 37,845.42, while the broader Topix index rose 1.29% to 2,783.56.Over in South Korea, the Kospi index closed flat at 2,612.34 while the small-cap Kosdaq added 0.27% to end at 745.54.Australia’s S&P/ASX 200 ended the day flat at 7,860.40, paring gains from earlier in the session.India’s benchmark Nifty 50 added 1.20%, while the BSE Sensex increased 1.07% as at 1.15 p.m. local time.— Amala BalakrishnerInvestors have seen ‘whiff’ of stagflation, Mohamed El-Erian saysMarket participants have gotten a taste of what so-called stagflation would look like, according to Mohamed El-Erian, chief economic advisor at Allianz.Stagflation refers to a combination of higher prices and slower economic growth. Though this economic setup has not been seen in the U.S. in half a century, President Donald Trump’s tariff policy has raised alarm that it could be coming back.“I call it a whiff of stagflation,” El-Erian said on CNBC’s “Closing Bell: Overtime.”El-Erian added that investors should keep an eye out for anything that can show growth is cooling toward 1%, which he called “stall speed.”— Alex HarringSee the stocks moving after hoursThese are some of the stocks making notable moves in after-hours trading:Eastman Kodak — Shares of the photography-focused company popped 9.2% after net income and operational EBITDA both came in higher for the fourth quarter compared with the same period a year prior. Revenue, on the other hand, slipped about 3% to $266 million for the quarter.Hallador Energy — The Indiana-based energy provider dropped 6.8% after revenue missed analysts’ expectations for the fourth quarter. Hallador posted $94.2 million, under the consensus forecast of $95.5 million from the two analysts polled by FactSet. — Alex HarringStock futures are little changedFutures tied to the Dow, S&P 500 and Nasdaq 100 all sat near flat shortly after 6 p.m. ET. on Monday night.— Alex Harring
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