FILE PHOTO: American flags are displayed on screens on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., September 22, 2025. REUTERS/Jeenah Moon/File Photo

By Sukriti Gupta and Twesha Dikshit

(Reuters) -U.S. stock index futures declined on Tuesday as renewed concerns over a U.S.-China trade conflict dampened risk appetite, while investors parsed results from big U.S. banks that kicked off the third-quarter reporting season.

Markets had rebounded in the previous session after President Donald Trump's conciliatory tone on trade tensions with China as well as Treasury Secretary Scott Bessent's comments that the U.S.-China meet later this month remained on track.

Trump's threats to impose additional 100% tariffs on Chinese goods over Beijing's rare earths export controls had led to a sharp sell-off in stocks on Friday.

On Tuesday, Washington and Beijing began charging additional port fees on ocean shipping firms that move everything from holiday toys to crude oil, reviving trade frictions.

"Markets are still hopeful that another TACO (Trump always chickens out) trade will happen, but the risks of further escalation and imposition of 100% tariffs by the end of the month are limiting further upside in a stock market that was already heavily overbought," Daniela Hathorn, senior market analyst at Capital.com, said in a note.

At 7:08 a.m. ET, Dow E-minis were down 279 points, or 0.6%, S&P 500 E-minis were down 68 points, or 1.02%, and Nasdaq 100 E-minis were down 333 points, or 1.34%.

Also in spotlight is the earnings season that will help investors assess impact of tariffs on Wall Street's largest companies.

Wells Fargo shares rose 1.6% premarket after it beat Wall Street estimates for third-quarter profit.

BlackRock and JPMorgan Chase posted higher third-quarter profits with BlackRock's assets under management hitting a record $13.46 trillion. Still BlackRock shares fell 0.6%, while JPMorgan edged up 0.2%.

Goldman Sachs and Citigroup are also set to release quarterly results on the day.

The earnings reports will provide fresh clues on the economy at a time when major official data releases remain delayed due to an ongoing government shutdown.

Analysts on average expect S&P 500 companies' third-quarter earnings to grow 8.8% from a year ago, according to LSEG data.

The AI-driven momentum and optimism around U.S. rate cuts have helped markets in recent months. AI-related tech stocks were the biggest winners in Monday's rebound.

Broadcom lost 2.6% in premarket trading after surging almost 10% on Monday when it partnered with OpenAI to produce the startup's first in-house artificial intelligence processors.

Investor focus will be on Federal Reserve Chair Jerome Powell's speech at the NABE annual meeting for further insight into the U.S. central bank's monetary policy path.

Among other moves, Johnson & Johnson shares rose 0.6% after the company said it would spin off its orthopedics business and raised its full-year forecast.

Shares of U.S. rare earth miners rose premarket, adding to sharp gains in the previous session. Analysts expect the U.S. to ramp up efforts towards reducing reliance on China.

Critical Metals rose 37.4%, USA Rare Earth gained 8.3% and MP Materials advanced 5.8%.

U.S.-listed shares of Chinese companies fell. Alibaba Group, JD.com and PDD Holdings declined 3.7%, 2.3%, and 3%, respectively.

(Reporting by Sukriti Gupta in Bengaluru; Editing by Maju Samuel)