Nasdaq futures rose Tuesday as Nvidia and other artificial intelligence-related stocks firmed after a sharp fall, as investors awaited fresh clues on monetary policy following remarks from the officials at the US Federal Reserve this week.
The company Nvidia, specializing in artificial intelligence chips, rose 2.1% at the start of the market. Chipmakers Micron Technology, Broadcom and Qualcomm also regained some ground and rose more than 1% each, while AI-optimized server maker Super Micro Computer rose 2%.
“Nvidia’s exponential rise since the beginning of last year has certainly been the subject of heavy speculation […] sharp rises were often followed by sharp declines,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
“It’s too early to call the end of the Nvidia mania, but given the amount of speculation surrounding the stock, we should see price action get worse before it gets better.”
The tech-heavy Nasdaq posted its biggest one-day decline of more than 1% since late April as investors pulled out of artificial intelligence-related stocks and being turned towards other sectors, which allowed the Dow Jones to reach its highest level in a month on Monday.
Earlier in the week, investors bought into sectors such as utilities, consumer staples and energy, which have underperformed tech and near-tech stocks this year, due to continued optimism about AI.
While the Fed’s favorite inflation gauge, Friday’s Personal Consumption Expenditures (PCE) Price Index is at the top of the watchlist, investors will also keep an eye on consumer confidence data during the day.
Fed Governors Michelle Bowman and Lisa Cook, members of this year’s voting committee, are expected to speak Tuesday.
Market participants estimate a 61% chance of a 25 basis point interest rate cut in September, and are looking at about two cuts by the end of the year, according to FedWatch data from LSEG.
A round of quarterly corporate results is also scheduled for the day, with cruise line Carnival Corp before the market opens and package delivery giant FedEx after the bell.
As of 5:33 a.m. ET, the Dow e-minis was down 14 points, or 0.04%, the S&P 500 e-minis was up 9.75 points, or 0.18%, and the Nasdaq 100 e-minis was up 83 points, or 0.42%.
Among other big pre-market moves, Spirit AeroSystems fell 5%. A report showed that Boeing offered to acquire the aircraft fuselage maker in a mostly stock-financed deal that values its main supplier at about $35 per share.
Trump Media & Technology Group rose 14.2%, poised to extend its big gains from Monday. The company said it expected $69.4 million in proceeds from the cash exercise of warrants. (Reporting by Ankika Biswas in Bengaluru; Editing by Shounak Dasgupta)
