Wall Street retreats modestly ahead of earnings and Federal Reserve meeting

U.S. markets were on track to open with modest losses Monday, while Japan's benchmark took a tumble after the yen rebounded against the U.S. dollar on rumors of possible government intervention.

Futures for the S&P 500 edged back 0.1%, while Dow Jones Industrial futures were largely unchanged. Futures for the Nasdaq retreated 0.2%.

Most major airlines were down more than 1% in early trading as thousands of flights were canceled due to a massive winter storm that affected travel from the Rockies all the way to the East Coast.

Natural gas futures climbed another 4.5% as cold weather set in across the country following the winter storm that dumped more than a foot of snow in places and left many without power.

In Asia, Japan's benchmark Nikkei 225 dropped 1.8% to finish at 52,885.25 on selling of big exporters like Toyota Motor Corp., whose shares fell 4.1%.

A weak currency is generally favorable for Japanese exporters because it helps elevate the value of their overseas earnings. In recent months, the dollar has gained against the yen but has fallen sharply in the past few days after officials in both Japan and the U.S. indicated they were prepared to intervene to support the yen.

Although finance officials did not directly confirm such intervention was in the works, they acknowledged being in close coordination with the U.S. on currency fluctuations.

“Intervention chatter did the trick," said Ipek Ozkardeskaya, a senior analyst at Swissquote. "Since Friday, the yen has staged a sharp rebound on expectations that Japanese authorities — possibly with U.S. coordination — would step in.”

The Japanese yen has been weakening against the U.S. dollar — and many other major currencies — since 2021. So Japanese consumers and companies pay more now for imported food, fuel and other items needed to keep the world’s fourth largest economy running.

The dollar slipped to 154.14 Japanese yen from 155.01 yen. It had been trading around 158 yen last week.

Gold gained another 2%, briefly breaching $5,100 an ounce, while silver jumped 8.5% to $110.04 per ounce. The value of precious metals has surged in recent months as investors sought relatively safe places to invest amid rising geopolitical uncertainty.

Markets this week will be focused on corporate earnings, some of which might show the negative effects from recent U.S. tariff policies.

In the latest such development, a threat by U.S. President Donald Trump to impose a 100% tariff on goods from Canada was countered by Canadian Prime Minister Mark Carney. Trump had warned he might hike tariffs if Canada signed a free trade deal with China. Carney said Canada had no plans for such a deal.

In 2024, Canada mirrored the United States by putting a 100% tariff on electric vehicles from Beijing and a 25% tariff on steel and aluminum. China had responded by imposing 100% import taxes on Canadian canola oil and meal and 25% on pork and seafood.

Breaking with the United States this month during a visit to China, Carney cut its 100% tariff on Chinese electric cars in return for lower tariffs on those Canadian products.

Earnings reports this week include the latest financial results from United Airlines, Boeing, General Motors, Meta, Microsoft and Apple.

Markets will also be paying close attention to the latest developments at the U.S. Federal Reserve, where officials meet this week to decide where to take interest rates. Most expect central bank officials to stand pat after they cut rates at the final three meetings of 2025.