U.S. equity futures were pointing slightly higher on Wednesday, suggesting that markets could recover some ground after Tuesday’s decline.
Nvidia (NASDAQ:NVDA) was helping lift sentiment in early trading, with shares up 0.7% premarket after CEO Jensen Huang told CNBC’s Squawk Box that demand for artificial intelligence computing has increased “substantially” over the past six months. The upbeat comments added to optimism for the broader tech sector, which has been a key driver of the market’s recent gains.
However, overall activity is expected to remain muted as investors await the release of the Federal Reserve’s September meeting minutes later in the day. The report could provide new insights into policymakers’ outlook after the central bank cut interest rates by a quarter point last month.
On Tuesday, Wall Street paused its recent rally, with the Nasdaq and S&P 500 retreating from Monday’s record highs. The Nasdaq fell 153.30 points (0.7%) to 22,788.36, the S&P 500 slipped 25.69 points (0.4%) to 6,714.59, and the Dow Jones Industrial Average dipped 91.99 points (0.2%) to 46,602.98.
Analysts said the decline reflected profit-taking after a strong stretch that saw the S&P 500 rise for seven consecutive sessions. Weakness in Oracle (NYSE:ORCL) also weighed on sentiment, with the stock dropping 2.5% following a report from The Information that raised concerns about the profitability of its AI initiatives.
Ongoing uncertainty surrounding the U.S. government shutdown also contributed to cautious trading. Lawmakers remain deadlocked over a temporary funding bill, as Democrats push to include an extension of enhanced Obamacare tax credits.
The shutdown has delayed several major economic reports, including last week’s nonfarm payrolls data, leaving investors with less clarity on the economy’s direction. Despite the data gap, markets still expect the Fed to implement another quarter-point rate cut later this month.
Remarks from Fed Chair Jerome Powell and other policymakers this week — along with today’s meeting minutes — could help clarify how far the central bank is prepared to go in easing policy.
Among sectors, housing stocks saw some of the steepest losses Tuesday, with the Philadelphia Housing Sector Index dropping 3.0% to its lowest close in nearly two months. Semiconductor shares also retreated, sending the Philadelphia Semiconductor Index down 2.1% after hitting a record high a day earlier.
Elsewhere, computer hardware, gold, and airline stocks fell sharply, while utilities offered some relative strength amid the broader market pullback.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
Leave a Reply