U.S. stock futures pointed slightly higher on Wednesday, suggesting that equities may attempt a modest rebound after several sessions of steep declines.
Some traders are stepping back in to scoop up discounted stocks following the recent slide, offering potential support in early trading.
On Tuesday, the major indexes closed at their lowest levels in a month, weighed down by persistent worries about an AI-driven market bubble.
Still, enthusiasm at the opening bell may remain limited as investors await earnings from one of the market’s most influential AI names, which will report results after the close.
Russ Mould, investment director at AJ Bell, warned: “Nvidia reports tonight and the slightest bit of news to disappoint investors has the potential to whip up a tornado across global markets.” He added: “Investors will be hanging on [CEO] Jensen Huang’s every word and looking for clues that big investment in AI is worth it.”
Mould also emphasized caution: “Huang is an eternal optimist and Nvidia has a habit of smashing earnings expectations. Therefore, investors might be digging deeper than usual into the numbers to spot any signs of weakness, rather than simply being swayed by the headline narrative.”
Traders are also hesitant to make meaningful moves ahead of Wednesday afternoon’s release of the Federal Reserve’s latest meeting minutes.
The minutes may shed more light on the central bank’s thinking on interest rates, especially after market expectations for a December cut have softened.
According to CME Group’s FedWatch Tool, the odds of a 25-basis-point rate cut next month currently stand near 50%.
On Tuesday, stocks attempted to recover from sharp early declines but still ended with hefty losses, extending Monday’s retreat and sending the major benchmarks to fresh one-month lows.
The Dow sank 498.50 points, or 1.1%, to 46,091.74. The Nasdaq fell 275.23 points, or 1.2%, to 22,432.85, while the S&P 500 dropped 55.09 points, or 0.8%, to 6,617.32.
Ongoing weakness in tech shares continued to drag on markets, with Nvidia (NASDAQ:NVDA) tumbling 2.8%—following a 1.8% drop on Monday—as traders brace for the company’s quarterly report.
Given recent anxiety over a potential AI bubble, Nvidia’s results and guidance could have an outsized influence on market sentiment.
Investors are also preparing for several key U.S. economic releases delayed by the recent government shutdown, including Thursday’s September jobs report.
On the data front, the Commerce Department reported that factory orders bounced 1.4% in August after a 1.3% decline in July—matching economist expectations.
Among sector moves, computer hardware stocks were hit hard, with the NYSE Arca Computer Hardware Index plunging 3.7%. Semiconductor and software names also slumped, deepening the Nasdaq’s pullback.
Retailers struggled as well, with the Dow Jones U.S. Retail Index sliding 2.4%. Home Depot (NYSE:HD) led the downturn, sinking 6.0% after reporting softer-than-expected third-quarter earnings and cutting its full-year profit outlook.
Conversely, energy stocks bucked the market downturn, supported by a sharp jump in crude prices. The NYSE Arca Oil Index rose 1.4%.
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