Traders work on the floor of the New York Stock Exchange.
NYSE
Stock futures are little changed on Monday night after tech losses dragged the broader market lower as investors await Nvidia‘s earnings report and delayed jobs data this week.
Futures tied to the Dow Jones Industrial Average rose 38 points, or just under 0.1%. S&P futures were up less than 0.1% as well, while the Nasdaq 100 futures added 0.1%.
The three major U.S. indexes closed in the red in the previous trading session. The 30-stock Dow Jones Industrial Average plunged more than 550 points, or 1.2%, while the S&P 500 and Nasdaq Composite each lost around 0.9%.
Nvidia notably declined about 2% ahead of the chipmaker’s third-quarter results due after Wednesday’s close. The company, which is reporting toward the end of a strong earnings season, has been at the center of a debate about the strength of the artificial intelligence-powered market rally this year. Concerns have grown about weak market breadth, pricey tech valuations and the soundness of AI fundamentals due to a boom in Big Tech debt offerings and the pace of AI chip depreciation.
The tech-heavy Nasdaq is on pace to snap its seven-month win streak, while the S&P 500 is down 2.5% in November after rallying for six months in a row.
“The market narrative has certainly shifted dramatically over the past few weeks, as the market’s reaction function with respect to AI has taken a sharp left turn from rewarding ever-growing capex spend to rapidly growing skepticism of further investment and future returns,” said Garrett Melson, portfolio strategist at Natixis Investment Managers Solutions. “Pair that with crowded positioning across real money and systematic accounts and you’ve got all the ingredients for a sharp de-risking and an accompanying narrative reset.”
To be sure, Melson remains bullish that a cooling labor market and an overall improving inflation picture will power a year-end rally. “Despite the fears, the AI cycle remains alive and well, something we expect NVDA will confirm on Wednesday. That certainly isn’t a bearish backdrop,” he said.
Aside from Nvidia’s report, investors this week will monitor data points that can inform the trajectory of upcoming interest rate decisions, which have scaled back in recent weeks. Fed funds futures traders are pricing in roughly 40% chance of a cut, significantly lower than the more than 90% chance priced in a month ago, according to the CME FedWatch tool. The Federal Reserve’s October meeting minutes and September nonfarm payrolls release, which will be the first piece of economic data released following the U.S. government shutdown, are on deck for Wednesday and Thursday releases, respectively.
This week will also see results from heavyweight consumer names such as Walmart, Home Depot and Target. The market is watching for clues on consumer spending activity, especially as holiday shopping season gears up.
