China’s Xi speaks with Trump by phone, discusses Taiwan and bilateral ties
Investing.com - Futures tied to the main U.S. stock averages edge down, as investors eye a widespread rout in stocks to begin the trading week. Equities, gold and Bitcoin were all ensnared by fears around the sustainability of the surge in enthusiasm around artificial intelligence, with the top indices on Wall Street sliding below a key metric used to assess potential upcoming performance. Home Depot reports its latest results, providing fresh insight into U.S. consumer spending activity, while Microsoft is set to open a closely-watched developers conference with the tech titan’s AI ambitions front of mind.
1. Futures fall
U.S. stock futures pointed lower on Tuesday, indicating an extension to a steep selloff in the prior session.
By 03:12 ET (08:12 GMT), the Dow futures contract had fallen by 146 points, or 0.3%, S^&P 500 futures had dropped by 28 points, or 0.4%, and Nasdaq 100 futures had declined by 124 points, or 0.5%.
On Monday, all three of the main U.S. averages slumped below their 50-day moving averages, a closely-watched metric of the intermediate-term trajectory of stocks.
The pace of the losses gathered pace in afternoon dealmaking, with tech stocks among some of the biggest decliners. In particular, shares of Nvidia, the artificial intelligence-darling who is due to unveil crucial quarterly earnings later this week, fell by 1.9%, weighing on peers like Advanced Micro Devices and Super Micro Computer.
Analysts at Vital Knowledge described investors as "jittery" and "nervous," especially after a $12 billion bond sale by AI hyperscaler Amazon reinforced fears that soaring spending on data centers is being increasingly backstopped by debt, instead of equity and cash flow.
The worries were enough to sour sentiment even after Google-parent Alphabet’s shares touched a new high on a fresh stake from Warren Buffett’s Berkshire Hathaway.
2. Waller calls for December rate cut
Despite the declines, U.S. equities did stage a muted rebound just before the closing bell after Federal Reserve Governor Christopher Waller argued for cutting interest rates at the central bank’s December meeting.
Waller flagged that recent private-sector hiring figures -- which the Fed was forced to turn to during a blackout of official economic indicators because of a record-breaking federal government shutdown -- were suggestive of employment growth that was near "stall speed" in September and October.
He added that another quarter-point rate reduction at the Fed’s gathering next month, its last one of 2025, will "provide additional insurance against an acceleration" in a cooling of the jobs picture.
Still, the outcome of that upcoming meeting remains very much a toss-up. Other Fed officials have warned against cutting rates until more up-to-date economic numbers are released and offer more obvious indications that labor market is weakening.
3. Home Depot reports
Home Depot headlines today’s slate of corporate earnings, kicking off a slew of retail results this week which analysts hope will shed some light on the health of the American consumer.
The home improvement chain trimmed its annual profit outlook, as tariff-fueled uncertainty hit demand for pricier renovation and do-it-yourself projects. Shares in Home Depot fell by more than 3% in premarket U.S. trading.
Along with a host of underwhelming returns from other firms linked to the housing sector in recent weeks, the retail industry has been grappling with broad economic uncertainty that has darkened the outlook for consumer spending, particularly on big-ticket items like home refurbishings and installations.
Raw material costs for products such as hardware and lighting have also risen, driven higher by President Donald Trump’s sweeping import tariffs. Home Depot, as well as rival Lowe’s, have both been forced to pass on more of these expenses to shoppers, yet observers anticipate that this headwind could be moderated by a trade detente between Trump and Chinese President Xi Jinping last month.
At the same time, strategists have said the Fed’s rate reductions could help spur demand among homeowners who have long put off remodeling projects because elevated rates have pushed up financing costs.
4. Microsoft annual developer conference in focus
Microsoft will open its annual developer conference in San Francisco, with markets eager for the software giant to reveal more details about its plans for rapid data center expansion to meet demand for AI computing power.
Last week, the Wall Street Journal reported that the company is now aiming to build a state-of-the-art set of two-floor AI "super factories" in Georgia. The expansion is part of Microsoft’s push to double its overall data-center footprint over the next two years, the WSJ said, adding that the site will be used to help train some of Microsoft’s own AI models.
During its fiscal first quarter, Microsoft shelled out over $34 billion in capital expenditures and indicated that it would further raise its infrastructure investments.
The announcement was one of a series from mega-cap tech groups who together are proposing to spend $400 billion on AI this year. Underpinning the bonanza of expenditures is a desire among these firms to secure their position in the race to harness -- and monetize -- the nascent technology.
5. Bitcoin wipes out 2025 gains
Bitcoin briefly dropped below the $91,000 mark on Tuesday, in the latest leg of a deepening slide for the world’s largest cryptocurrency that has threatened to engulf other digital assets.
The token has erased all of its gains made in 2025 and is now exchanging hands around more than 25% under a record peak notched a little over a month ago.
Worries around the wider economic backdrop, including uncertainty over the state of the American economy and the trajectory of Fed rate policy, have taken some of the shine off of Bitcoin’s appeal, analysts have said.
Bitcoin spot exchange-traded funds have also been hit by accelerating outflows, as investors unwind positions tied to expectations for looser monetary conditions.