U.S. equity futures edged slightly lower as investors looked ahead to earnings reports from megacap American companies with a combined market value of around $20 trillion.

S&P 500 Futures ticked down 0.1% to 5,520.75 points, while Nasdaq 100 Futures also fell 0.1% to 19,421.75 points by 07:42 ET (12:42 GMT). Dow Jones Futures were largely unchanged.

U.S.-China trade confusion dampens Wall Street momentum

Major Wall Street indexes saw weekly gains on Friday after Alphabet’s (NASDAQ:GOOGL) better-than-expected quarterly results stoked fresh optimism on artificial intelligence, extending the recent rally in tech.

"There remains a lot of hope and hype about trade deals, and this might prevent a sharp slump in the SPX in the immediate term, but the index is at the top-end of its trading range and shouldn’t be chased beyond ~5500," Vital Knowledge analyst Adam Crisafulli said in morning’s note to clients. 

The {166|S&P 500}} index closed 0.7% higher Friday, and the NASDAQ Composite jumped 1.3%, while the Dow Jones Industrial Average closed largely unchanged.

Sentiment was also supported after media reports last week showed that China has exempted certain U.S. imports from its retaliatory 125% tariffs.

However, investors turned cautious again as U.S. Treasury Secretary Scott Bessent on Sunday contradicted President Donald Trump’s earlier remarks, saying he was unaware of any ongoing tariff negotiations with China and unsure if Trump had recently spoken with Chinese President Xi Jinping. 

This challenged Trump’s statements from last week, where he suggested that discussions were happening and that he had personally engaged with Xi.

The Trump administration has shown signs of wanting to ease tensions in the ongoing trade war, which has already rattled markets and fueled fears of a global recession. 

However, China’s denial that any talks are happening has cast serious doubt on the U.S. narrative.

These mixed messages are keeping investors on edge as they are caught between hopes for a breakthrough and fears of worsening tensions.

Earnings ahead: Apple, Microsoft, Amazon, Meta 

Investors were eyeing earnings from the “magnificent seven” megacaps, including Apple Inc (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), and Meta Platforms Inc (NASDAQ:META), this week.

"The Q1 earnings season (and Q1 economic data) have been decent, but this is in part because the full effects of tariffs haven’t been felt – that will soon change," Crisafulli added. 

Microsoft and Meta are set to report on Wednesday, while Apple and Amazon are scheduled to report their earnings on Thursday.

These reports are key to gauging corporate resilience amid ongoing tariff tensions and capital expenditure worries around AI.

Earnings from other major sectors, like Visa (NYSE:V), Coca-Cola Co (NYSE:KO), and Caterpillar Inc (NYSE:CAT), were all due this week.