U.S. stock futures traded lower Tuesday, pulling back after recent gains as optimism over a potential peak in interest rates fades while the quarterly earnings season continues.

By 06:25 ET (11:25 GMT), the Dow Futures contract was down 80 points, or 0.2%, S&P 500 Futures traded 11 points, or 0.3%, lower and Nasdaq 100 Futures dropped 35 points, or 0.3%.

Optimism over peak rates fades
The main indices on Wall Street enjoyed their best week of the year last week, and posted small gains on Monday, on hopes that an era of unprecedented monetary tightening by the Federal Reserve may be coming to an end.

However, this confidence has started to wane after Federal Reserve Bank of Minneapolis President Neel Kashkari said on Monday that the U.S. central bank likely has more work ahead of it to control inflation.

“We haven’t completely solved the inflation problem. We still have more work ahead of us to get it done,” he said in an interview.

Adding to the negative sentiment, the Reserve Bank of Australia hiked interest rates earlier Tuesday, citing a slower-than-expected decline in inflation.

A trio of Fed officials are due to speak later this session, ahead of two appearances by Chair Jerome Powell in the coming days, with investors watching for clues on the central bank’s next moves in its attempt to tame inflation.

Earnings season continues
The quarterly earnings season continues this week, although it’s coming to an end with over 80% of the S&P 500 companies having already reported.

Ride-hailing platform Uber Technologies (NYSE:UBER), energy company Occidental Petroleum Corporation (NYSE:OXY) and online dating company Bumble (NASDAQ:BMBL) and among the key companies scheduled to report earnings on Tuesday.

Additionally, WeWork (NYSE:WE) has filed for bankruptcy in a New Jersey court, as the flexible co-working space provider grapples with a post-pandemic downturn in office occupancy and expensive leases.

Crude sinks on weak Chinese trade data
Oil prices fell sharply Tuesday, dropping to over two-month lows, after the disappointing trade data from China raised concerns over sluggish demand in the world’s largest oil importer.

Chinese exports fell more than expected in October amid worsening overseas demand, while an unexpected rise in imports saw China’s trade surplus shrink to its worst level in 17 months.

This prolonged weakness in exports could stymie growth in the country going forward and thus dent oil demand.

By 06:25 ET, the U.S. crude futures traded 1.6% lower at $79.56 a barrel, while the Brent contract dropped 1.8% to $83.67 a barrel – both falling to their lowest levels since late August.

Both contracts have slumped over the past week, amid growing expectation that the Israel-Hamas war will not disrupt supply in this oil-rich region.

Additionally, gold futures fell 0.9% to $1,970.95/oz, while EUR/USD traded 0.4% lower at 1.0678.