By Johann M Cherian (Reuters) -U.S. stock index futures dipped on Tuesday, a day after a tech-fueled rally in equities, as investors await economic data and earnings that could offer insights into the resilience of the American consumer. Bucking broader declines, Alphabet jumped 4% in premarket trading after a report said Facebook parent Meta Platforms <META.O> […]
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US futures ease with investors’ focus on data, Alphabet shines
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By Johann M Cherian
(Reuters) -U.S. stock index futures dipped on Tuesday, a day after a tech-fueled rally in equities, as investors await economic data and earnings that could offer insights into the resilience of the American consumer.
Bucking broader declines, Alphabet jumped 4% in premarket trading after a report said Facebook parent Meta Platforms <META.O> was in discussions to use Google’s AI chips in its data centers from 2027 and rent chips from Google Cloud by next year.
Broadcom, which helps Alphabet make its AI chips gained 2.5%, while Nvidia and Advanced Micro Devices, which currently dominate the AI chips sector, fell nearly 4% each.
Shares of the Google parent have rallied almost 70% this year, outperforming other megacaps and bringing it close to the prized $4 trillion market capitalization.
The Nasdaq logged its biggest one-day gain in six months on Monday, as investors scooped up tech stocks following several bouts of selling in recent weeks driven by worries of stretched valuations in the sector and high AI spending by large companies.
Market sentiment, however, has recently been supported by growing bets the Federal Reserve will lower borrowing costs in December following dovish remarks by influential voting members on the Federal Open Market Committee such as John Williams and Christopher Waller.
A report said San Francisco Fed President Mary Daly also backed lowering interest rates next month.
Traders are pricing in an 80% chance the Fed will cut rates by 25 basis points next month, doubling from around 40% last week, according to the CME Group’s FedWatch Tool.
By 06:57 a.m. ET, S&P 500 e-minis were down 9.75 points, or 0.15%. Nasdaq 100 e-minis were down 78.25 points, or 0.31%, and Dow e-minis were down 56 points, or 0.12%.
Traders also monitored developments around a Ukraine peace deal and signs of improving Sino-U.S. trade relations.
CONSUMER IN SPOTLIGHT
Investors will assess September retail sales data and the Conference Board’s November consumer confidence report later in the day for clues into the health of the American consumer at a time when tariff-induced price pressures and layoffs have grabbed headlines.
A delayed producer prices inflation report for September is also due at 8:30 a.m. ET, with focus on the components that feed into the Fed’s preferred inflation gauge – the Personal Consumption Expenditures Index.
“Markets will be looking for further reassurance that the soft-landing narrative isn’t gravitating in the direction of stagflation,” said Derren Nathan, head of equity research, Hargreaves Lansdown.
Among the companies that reported their earnings on Tuesday, Kohl’s surged 22% after the department store operator raised its annual profit forecast for the second time this year, while electronics retailer Best Buy added 2.5% after it raised its annual forecast.
Apparel retailer Burlington Stores tumbled 5.1% after its third-quarter revenue missed estimates.
For retailers, the holiday shopping season this month between the Thanksgiving holiday on Thursday through Cyber Monday next week will be crucial for sales.
Among other stocks, U.S.-listed shares of Alibaba rose 3.2% after the Chinese e-commerce giant beat analysts’ estimates for quarterly revenue.
(Reporting by Johann M Cherian and Sruthi Shankar in Bengaluru; Editing by Krishna Chandra Eluri)