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Investing.com-- Wall Street futures steadied on Tuesday evening after growing caution over upcoming earnings from Nvidia and a key labor market print sparked extended losses during the main session.
Technology stocks remained squarely on the backfoot amid persistent concerns over stretched artificial intelligence-fueled valuations, while waning bets on a December interest rate cut by the Federal Reserve also weighed.
Retailer stocks retreated following weak earnings from Home Depot Inc (NYSE:HD), with a host of major firms set to report in the coming days.
S&P 500 Futures rose less than 0.1% to 6,644.25 points, while Nasdaq 100 Futures were flat at 24,606.25 points by 18:44 ET (23:44 GMT). Dow Jones Futures rose 0.1% to 46,229.0 points.
Tech rout persists as Nvidia earnings loom
Tech stocks continued to lose ground on Tuesday, with NVIDIA Corporation (NASDAQ:NVDA) falling 2.8% amid growing caution over its earnings, which are due after the close on Wednesday.
While the AI bellwether is widely expected to log a strong quarter, focus will be chiefly on whether it can justify its massive, near-$5 trillion valuation, as well as provide positive signals on AI. Investors are watching for a beat and raise from the market darling.
Doubts over AI were a key weight on tech stocks in recent weeks, as investors questioned whether hype over the technology had formed a bubble in tech valuations. Nvidia is at the heart of a massive AI-fueled valuation spike over the past three years.
Other tech majors also retreated, with chipmakers Advanced Micro Devices Inc (NASDAQ:AMD) and TSMC (NYSE:TSM) down 4.3% and 1.5%, respectively. Amazon.com Inc (NASDAQ:AMZN) slid 4.4%, while Palantir Technologies Inc (NASDAQ:PLTR) and Microsoft Corporation (NASDAQ:MSFT) fell between 2% and 3%.
Beyond tech, major retailer stocks fell following disappointing earnings from Home Depot Inc (NYSE:HD), which tumbled 6%. Lowe’s Companies Inc (NYSE:LOW) fell 2.3% and Walmart Inc (NYSE:WMT) shed 1.5%, before their earnings on Wednesday and Thursday, respectively, while Target Corporation (NYSE:TGT) was flat.
The S&P 500 fell 0.8% to 6,617.37 points on Tuesday. The NASDAQ Composite fell 1.2% to 22,432.85 points, while the Dow Jones Industrial Average slid 1.1% to 46,091.68 points.
Dec rate cut bets erode, nonfarm payrolls awaited
Wall Street was also battered by traders steadily pricing out expectations for a December rate cut by the Fed. CME Fedwatch showed markets pricing in a 43.4% chance for a 25 basis point cut during the Fed’s December 10-11 meeting, down from last week’s probability of 61.9%.
Delays in several official economic readings, due to a prolonged government shutdown, are expected to leave the Fed flying blind into its December meeting, making a hold more likely.
Nonfarm payrolls data for September is due on Thursday and will offer some cues on the labor market, which, with inflation, is a key consideration for the Fed in adjusting rates.