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Wall Street Wavers as AI Concerns Eclipse Shutdown Optimism

US markets stumbled on Tuesday as renewed anxiety over artificial intelligence investments weighed on investor sentiment, overshadowing optimism that Washington may soon resolve the record-breaking government shutdown. The Dow Jones Industrial Average held near the flat line , while the S&P 500 slipped about 0.2% . The Nasdaq Composite fell 0.3% , retreating after a strong start to the week that had been fueled by hopes of an AI-driven rally. Investor confidence in the AI sector was shaken after SoftBank Group announced it had sold its entire stake in Nvidia , redirecting funds toward its own AI ventures. The move raised fresh questions about whether the massive capital flowing into AI will deliver returns that justify lofty valuations. Meanwhile, CoreWeave trimmed its full-year revenue forecast , sending its shares down more than 8% in premarket trading. Despite the pullback, optimism remains that a resolution to the US government shutdown could provide a stabilizing force for ...
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US Futures Recover as Tech Sector Leads the Way

 

US stock futures are pointing to a rebound from recent losses, with investors looking to fresh quarterly earnings for inspiration amid dwindling hopes for an early 2024 interest rate cut. S&P 500 futures added around 0.4%, while those on the tech-heavy Nasdaq 100 jumped 0.7%. Dow Jones Industrial Average futures hugged the flatline. 

Techs are in the vanguard after a bullish AI-fueled revenue outlook from TSMC, a key supplier to Apple and Nvidia. The Taiwanese contract chipmaker’s profit fell but beat Wall Street estimates. Shares of AMD and other chipmakers stepped higher in premarket as TSMC put on almost 7%. 

Stocks are still struggling to get off the ground this year as central bankers’ comments and mixed economic data put investors’ faith in a Federal Reserve pivot to the test. The odds of a rate cut in March as seen by traders have dropped 10 percentage points from a week ago, per the CME FedWatch Tool (Chicago Mercantile Exchange Group).

Investors are on the lookout for fresh data to feed their expectations, so Thursday’s release of readings on weekly jobless claims will be in focus. Housing starts and building permits for December are also on the docket. Eyes will also be on Atlanta Fed President Raphael Bostic, scheduled to appear twice today and closely watched for any deviation from his colleagues’ pushback on rate-cut bets.


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