S&P 500 Forecast: Will February’s Weak Seasonal Trend Cap Gains for US Indices?

S&P 500 Futures Edge Higher as Markets Absorb Tariff Moves

S&P 500 futures rose slightly Tuesday as traders evaluated the latest tariff actions from both the U.S. and China. Nasdaq-100 futures inched up 0.1%, while Dow Jones Industrial Average futures slipped 83 points, or 0.2%.

China responded to the U.S. tariffs with levies of up to 15% on coal and liquefied natural gas and 10% duties on crude oil, farm equipment, and certain vehicles. This followed President Donald Trump’s weekend decision to impose 25% tariffs on Mexico and Canada and a 10% levy on China. However, duties on Canada and Mexico were paused for 30 days after strong pushback.

Markets initially sold off on Monday but recovered sharply. The Dow, which had fallen more than 600 points, ended down just 0.28%. The S&P 500 lost 0.76%, while the Nasdaq Composite dropped 1.2%.

Will Apple Be Forced to Raise iPhone Prices?

Apple is among the most exposed companies to ongoing trade tensions. Morgan Stanley warned that the 10% tariff on Chinese goods, which took effect Tuesday, could create a 3.5% headwind to Apple’s earnings per share.

While Apple has begun shifting production to India, its existing facility there produces only 13% of iPhones, far from enough to replace the 67 million units shipped to the U.S. annually. There is speculation that the White House could grant Apple an exemption, as it did in Trump’s first term.

If Apple is forced to absorb the increased costs, it may have to raise iPhone prices by approximately 3%, which analysts estimate would amount to about an extra $1 per month for consumers over a typical two-year installment plan.

Is February a Historically Weak Month for Stocks?

Bank of America’s Stephen Suttmeier cautioned that February has historically been one of the weaker months for equities. Since 1928, the S&P 500 has posted a gain only 53% of the time in February, with an average return of -0.09%.

The trend is even weaker in the first year of a presidential term. Historical data shows the S&P 500 has risen just 46% of the time in such years, with an average return of -1.66%. However, seasonal trends typically improve moving into March and April.

How Are Automakers Reacting to Tariff Uncertainty?

General Motors and Ford saw their stocks recover more than 1% in premarket trading Tuesday following Trump’s decision to delay Canada tariffs for 30 days. Both companies were among Monday’s hardest-hit stocks due to their extensive supply chains in Canada and Mexico.

Auto suppliers also face pressure. German parts giant ZF, which exports heavily from Mexico, warned that tariffs could force price hikes across the industry. Analysts at AutoForecast Solutions noted that 25% tariffs could create “dramatic and immediate” financial stress for automakers reliant on North American trade.

What’s Next for Markets?

Investors are watching key economic data for further signals on market direction. Friday’s January nonfarm payrolls report will provide insight into labor market strength, while Tuesday’s Job Openings and Labor Turnover Survey (JOLTS) and durable goods orders could offer clues about economic momentum.

Trade uncertainty remains a dominant risk factor. While some investors view tariff-driven declines as buying opportunities, any further escalation could test market confidence.

More Information in our Economic Calendar.