Investing.com - Futures linked to the main U.S. stock indices inch up, with observers eyeing a potential shift in the nature of the artificial intelligence trade. Dell Technologies lifts its annual guidance thanks to an ongoing spike in AI server demand, while farm-equipment group Deere & Co is due to report its latest quarterly results. The Federal Reserve is also scheduled to release its "Beige Book" report of comments from businesses and households, as bets on a December interest rate cut increase.
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1. Futures edge higher
U.S. stock futures pointed higher on Wednesday after analysts noted a growing splintering in the AI sector in the previous session.
By 02:28 ET (07:28 GMT), the Dow futures contract had risen by 135 points, or 0.3%, S&P 500 futures had climbed by 28 points, or 0.4%, and Nasdaq 100 futures had advanced by 143 points, or 0.6%.
The main averages on Wall Street gained on Tuesday, with the blue-chip Dow Jones Industrial Average notching its best day since August. The benchmark S&P 500 and tech-heavy Nasdaq Composite added 0.9% and 0.7%, respectively.
Shares of Alphabet were in sharp focus, ticking up by 1.5% and taking a fresh step toward a $4 trillion market value, following a media report that it was in talks with Meta to supply Google’s AI-focused chips to the Facebook owner’s data centers. Google has been racing to carve out its place as a maker of AI processors, partially in a bid to reduce its reliance on third-party vendors.
Analysts flagged that this could spell more competition for Nvidia, the semiconductor firm who has been at the center of the multi-year AI boom. The news also threatened to exacerbate worries around a slew of circular deals in the AI sector, many of which revolve around Nvidia’s largesse.
Nvidia’s stock price slid by 2.6%, further underlining a bifurcation between the two heavyweights which has become apparent this month. So far in November, Alphabet’s shares are 15% higher, Nvidia’s 12% lower.
Elsewhere, a fresh slate of U.S. economic data -- delayed by a recent federal government shutdown -- showed that retail sales rose by less than expected in September, while a gauge of producer prices rebounded. The numbers did little to alter bets that the Federal Reserve will cut interest rates at its meeting next month, with investors wagering that policymakers will prioritize a weakening labor market over sticky inflation.
2. Dell boosted by surging AI server demand
Shares of Dell Technologies rallied by more than 4% in extended hours trading, fueled by a higher-than-expected current-quarter revenue and profit outlook.
Underpinned by soaring demand for its AI servers that are often equipped with Nvidia’s chips, Dell said it now expects to post fourth-quarter revenue of $31 billion to $32 billion, compared to LSEG estimates cited by Reuters of $27.59 billion. Adjusted income is also tipped to be $3.50, topping projections of $3.21.
Dell also raised its annual financial targets. Fiscal 2026 revenue is seen at $111.2 billion to $112.2 billion, versus a forecast of $105 billion to $109 billion previously. Its guidance for adjusted earnings per share was also lifted to $9.92.
Speaking in a post-results call, Chief Operating Officer Jeff Clarke added that Dell would "do everything" it can to mitigate price increases following a jump in production costs. Investors have raised worries that the company’s margins could come under pressure from these expenses, as well as from intensifying competition from rival server makers like Super Micro Computer.
Still, Dell, whose varied customer portfolio ranges from the U.S. Department of Energy to CoreWeave, predicted that AI server shipments would amount to $25 billion in revenue in its fiscal 2026 -- up from a prior view of $20 billion.
New orders powered a rise in third-quarter AI server backlog to $18.4 billion as well.
3. Deere & Co to report
One of the headliners of the earnings list for Wednesday will be agricultural equipment firm Deere & Co.
According to Bloomberg consensus estimates, the company is expected to post fiscal fourth-quarter net income of $1.05 billion on revenue of $11.55 billion.
In August, Deere & Co reported a decline in third-quarter profit and warned that it would take a bigger hit from sweeping U.S. tariffs than initially anticipated, as the levies darkened the outlook for farm-equipment providers already facing tepid demand from a downturn in crop prices in North America.
But analysts have suggested that the gloom may be showing signs of clearing. U.S. President Donald Trump and Chinese counterpart Xi Jinping reached a trade agreement last month, while cuts to U.S. interest rates in September and October -- and possibly in December -- could bolster the environment for construction spending.
4. Beige Book ahead
The economic calendar is set to be highlighted by a report from the Fed compiling commentary on the economy from businesses and households.
Due to the paucity of official data during the shutdown, analysts have suggested that the Fed’s so-called "Beige Book" -- a compendium of survey results, interviews and other qualitative information released two weeks prior to the central bank’s latest rate decision -- will have extra importance as a tool to help policymakers calibrate borrowing costs.
In October, the Beige Book signaled that while U.S. economic activity has been broadly stable, there have been emerging warnings of potential softening, particularly in increased layoffs and a pullback in spending by lower- and middle-income households.
"The labor market is still weak and [...] we’re getting no evidence telling me it’s rebounding," Fed Governor Christopher Waller said in an interview with Fox Business earlier this week.
5. Oil trades near one-month lows
Oil prices steadied near a more than one-month low, but further downside still looks open given an expected supply glut and a potential Russia-Ukraine peace deal.
Brent futures slipped 0.2% to $61.65 a barrel, and U.S. West Texas Intermediate crude futures fell 0.5% to $57.83 a barrel.
Both crude benchmarks settled lower on Tuesday after Ukrainian President Volodymyr Zelenskiy told European leaders that he was ready to advance a U.S.-backed framework for ending the war with Russia, possibly resulting in Russian crude re-entering global supply.
However, Trump appeared to back away from a Thanksgiving deadline for Ukraine to agree to the peace deal with Russia on Tuesday, saying only that progress was being made in the negotiations.
Meanwhile, U.S. crude stocks fell last week, according to the American Petroleum Institute, with official stockpile data from the Energy Information Administration due later in the session.