- US stock futures showed mixed movement after Monday’s strong tech and AI rally
- S&P 500 futures fell 0.08%, Nasdaq-100 futures down 0.06%, Dow futures rose 0.7%
- Profit-taking followed gains led by Meta, Intel, AMD, Nvidia, and Corning on Monday
US stock futures were mixed early Tuesday as investors paused after a powerful rally in technology and artificial intelligence stocks pushed the major Wall Street indices higher in the previous session. S&P 500 futures were down 0.08%, while Nasdaq-100 futures slipped 0.06%. Dow Jones Industrial Average futures edged up 0.7%.
Here are three key factors driving the US stock market today.
Profit-Taking After AI-Led Rally
Investors appeared to be taking a breather after Monday's sharp gains, with profit-taking emerging following a strong run in AI and technology stocks. The S&P 500 jumped 1.5% on Monday, marking its best session since August 4. The Nasdaq Composite surged 2.3% and recorded its first closing record since June, while the Dow Industrials gained 366 points, or 0.7%.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
AI-related stocks were at the centre of the rally. Meta Platforms surged more than 11%, while chipmakers Intel and Advanced Micro Devices jumped 12% and around 10%, respectively. AMD also briefly touched a $1 trillion market capitalisation. Nvidia gained 2%, while Corning, a major supplier of fibre-optic products used in data centres, advanced nearly 6%.
After such a strong advance, investors appeared to be locking in some gains in early Tuesday trading, leaving futures largely subdued.
US-China Talks Keep Investors Cautious
Investors are also exercising caution ahead of upcoming US-China discussions, with markets looking for clarity on trade and broader economic relations between the world's two largest economies. The talks come at a time when investors are already monitoring geopolitical risks, energy prices and the outlook for global growth.
ALSO READ: At Least One More Fed Hike Likely; RBI Also Set To Raise Rates, Says Nomura — Here's Why
Any developments around trade restrictions, tariffs or technology-related measures could have implications for US technology companies and semiconductor stocks, which have been among the strongest performers in the recent rally.
Oil Prices, Strait Of Hormuz Developments
Movements in crude oil prices remain another major driver for Wall Street, particularly given concerns over inflation and the potential impact of elevated energy costs on the US economy. US futures trimmed their early losses and European stocks turned higher after Japanese news agency Kyodo reported that Iran had offered to reopen the Strait of Hormuz within seven days. The report triggered a decline in crude prices.
Oil had already fallen sharply on Monday. West Texas Intermediate crude futures dropped 4.5% to $95.78 a barrel, while international benchmark Brent crude settled more than 3% lower at $100.34 a barrel.
A sustained decline in crude prices could ease some of the inflationary pressure that has been worrying investors, although developments around the Strait of Hormuz remain closely watched given its importance to global energy supplies.
The decline in oil prices was accompanied by a pullback in US Treasury yields. The 10-year Treasury note yield fell more than 4 basis points to 4.951%. Treasury yields had been trending higher even before the Federal Reserve raised its key interest rate by 25 basis points last week. Investors have been concerned about rising US government debt, elevated energy prices and persistent inflation.
Lower Treasury yields can provide some relief to equity valuations, particularly for growth and technology stocks, which are sensitive to changes in borrowing costs and discount rates.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
