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PepsiCo ( PEP ) down after forecasting annual profit below

estimates

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Merck ( MRK ) falls on dour 2025 forecast

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Futures: Dow down 0.13%, S&P 500 up 0.07%, Nasdaq up 0.22%

(Updates prices before markets open)

By Shashwat Chauhan and Sukriti Gupta

Feb 4 (Reuters) -

Wall Street was on track to a cautious opening on Tuesday as

investor appetite for risk waned after China retaliated against

new trade restrictions announced by U.S. President Donald Trump

with counter tariffs.

Minutes after U.S. President Donald Trump's 10% tariff on

Chinese goods kicked in at 12:01 a.m. ET (0501 GMT), China's

finance ministry announced levies on some U.S. imports,

effective Feb. 10.

Beijing's limited reply to Trump's imposition underscored

its attempts to engage the U.S. president in talks and avert an

outright trade war between the world's two largest economies.

"The tariff gun is clearly loaded... we don't know if it

eventually is going to fire, (but) we now have some time in

between the announcement and the implementation," said Art

Hogan, chief market strategist at B. Riley Wealth.

"Markets are going to take the pause and try to price in

the uncertainty."

Biotechnology firm Illumina ( ILMN ) and PVH Corp ( PVH ),

the holding company for brands including Calvin Klein, dropped

more than 4% each in premarket trading after China placed the

firms in its "unreliable entity list".

Trump had also imposed a 25% tariff on goods from Mexico and

Canada over the weekend, but agreed to a 30-day pause in the

levies on Monday, in return for border and crime concessions

from both countries.

The last-minute change helped the three major U.S. stock

indexes pare some of the heavy losses suffered earlier on Monday

and closed trading well off session lows.

The S&P 500 came as close as eight points to all-time

highs on Friday before selling off, as the tariffs rattled

global markets.

Three Federal Reserve officials warned on Monday that trade

tariffs carried inflation risks, with one arguing that

uncertainty over the outlook for prices called for slower

interest-rate cuts than otherwise.

Traders are pricing in no interest-rate action from the U.S.

Federal Reserve before June, with bets on a cut in June at 62%,

according to CME's FedWatch.

Comments from three Fed leaders including Atlanta's Raphael

Bostic are expected through the day.

In economic data, a December job openings reading is due at

10:00 a.m. ET on Tuesday, with the all-important January nonfarm

payrolls report expected on Friday.

At 08:30 a.m. ET, Dow E-minis were down 58 points,

or 0.13%, S&P 500 E-minis were up 4.5 points, or 0.07%,

and Nasdaq 100 E-minis were up 46.25 points, or 0.22%.

In earnings-driven moves, PepsiCo ( PEP ) fell 2.2%

after it forecast annual profit below expectations and missed

quarterly revenue estimates.

Merck ( MRK ) dropped 7.9% after the drugmaker said it would

pause shipments of Gardasil to China through at least mid-year,

as continued weak demand for the HPV vaccine there is expected

to hurt the company's 2025 revenue.

Palantir ( PLTR ) jumped 24% after the data analytics

company forecast first-quarter and annual revenue above Wall

Street estimates.

Pfizer ( PFE ) rose 1.3% after it beat estimates for

fourth-quarter profit, helped by strong sales of its

heart-disease drug and a smaller-than-feared drop in COVID-19

vaccine sales.