Stock futures are little changed this morning after major indexes soared to start the holiday-shortened trading week; a flurry of economic data that could affect the outlook for interest rates is due today; Nvidia shares are sinking following a report that Meta might use Google’s AI chips; tech manufacturer Sandisk is set to join the S&P 500 at the end of the week and its stock is rising; and shares of Alibaba are gaining after the Chinese e-commerce giant released its earnings report. Here’s what you need to know today.
Stock Futures Holding Steady After Monday’s Rally
Stock futures are hovering near unchanged as investors await a barrage of economic data reports that are due to be released today. The major indexes closed sharply higher on Monday, led by a rally in tech stocks, after losing ground last week amid concerns about a possible AI bubble. Futures tied to the Dow Jones Industrial Average and the benchmark S&P 500 were wavering between slight gains and losses, while those linked to the the tech-focused Nasdaq were down 0.1%. Bitcoin, which also jumped yesterday, was trading at $87,400 recently, down from an overnight high of of just above $89,000. Gold futures were up 0.9% at $4,130 an ounce, while crude oil futures were down slightly at around $58.60 per barrel. The yield on the 10-year Treasury note, which affects borrowing costs on a wide array of consumer loans, was at 4.03%, down from 4.04% late yesterday and trading at its lowest level in a month.
Economic Reports Set for Release as Investors Assess Likelihood of Rate Cut
Investors are set to receive a bevy of economic reports, much of which had been delayed because of the government shutdown. Data for September on producer prices, retails sales and home prices are due this morning, as are a report on pending home sales for October and the Conference Board’s consumer confidence index for November. The reports are likely to have an impact on the probability that traders are pricing in for an interest rate cut in December. The Federal Reserve has cut its benchmark rate in each of its last two meetings, but officials appear to be divided on whether another cut is warranted. Still, as of Tuesday morning, traders are pricing in an 80% chance that the Fed will trim rates at its December policy meeting, up from the 50% odds priced in a week ago, according to the CME Group’s FedWatch tracker. Optimism about a possible cut surged on Friday after the head of the New York Fed indicated he was open to a near-term cut.
Nvidia Shares Drop on Report Meta Might Use Google’s AI Chips
Nvidia (NVDA) shares are sliding in premarket trading following a report that its dominance in the artificial intelligence chipmaking industry could be at risk. Tech news publication The Information reported that Facebook and Instagram parent Meta (META) is considering using AI chips designed and manufactured by Alphabet (GOOGL)-owned Google. The decision does not appear to be made yet, as Meta is making decisions for data centers that are expected to be finished in 2027, but other tech giants taking an interest in Google’s specialized AI chips could create a weak point for Nvidia. Nvidia shares were down 4% this morning, after rising 2% yesterday.
Sandisk Shares Jump on S&P 500 Inclusion
Shares of Sandisk (SNDK) are moving higher Tuesday following a 13% jump Monday on the news that the the maker of the SD card and other computer storage products will be added to the S&P 500. Sandisk will replace The Interpublic Group of Companies (IPG), which is set to be acquired by Omnicom, another S&P 500 company. The changes will go into effect on Friday, along with corresponding change to a smaller index, the S&P SmallCap 600, where Sandisk will be replaced by PTC Therapeutics (PTCT). Inclusion in an index, especially a major one like the S&P 500, often provides a boost to stocks as it can introduce a company to a new audience of investors. Sandisk shares were up 3% in recent premarket trading.
Alibaba Stock Rises as Chinese Retailer’s Earnings Top Estimates
Shares of Alibaba (BABA), a Chinese e-commerce company, are rising Tuesday after the company’s latest quarterly results largely topped estimates. Revenue grew 5% year-over-year to 247.8 billion Chinese yuan ($34.8 billion), while earnings per share came in at CNY1.09, each well above the analyst consensus compiled by Visible Alpha. CEO Eddie Wu said the company has “entered into an investment phase to build long-term strategic value in AI technologies and infrastructure and a consumption platform integrating daily life services and e-commerce.” In February, the company said it expected to spend about $52 billion in its AI and cloud infrastructure over the next three years. U.S.-listed Alibaba shares were up 3% ahead of the opening bell.