Stock futures were little changed this morning after major indexes jumped to start the holiday-shortened trading week; A flurry of economic data that could impact the interest rates outlook is due today; Nvidia shares are sinking after reports that Meta could use Google’s AI chips; Tech maker Sandisk is set to join the S&P 500 at the end of the week and its stock is rising; And Alibaba shares are surging after the Chinese e-commerce giant released its earnings report. Here’s what you need to know today.
Stock futures remain flat after Monday’s rally
Stock futures are hovering nearly unchanged as investors await economic data reports to be released today. After losing ground last week amid concerns about a potential AI bubble, major indexes closed sharply higher on Monday as tech stocks rallied. Futures tied to the Dow Jones Industrial Average and the benchmark S&P 500 were swinging between modest gains and losses, while futures tied to the tech-focused Nasdaq were down 0.1%. Bitcoin, which also surged yesterday, recently traded at $87,400, just below an overnight high of $89,000. Gold futures were up 0.9% at $4,130 an ounce, while crude oil futures were slightly down at $58.60 a barrel. The yield on the 10-year Treasury note, which affects borrowing costs on a wide range of consumer loans, was 4.03%, down from 4.04% late yesterday and trading at its lowest level in a month.
Economic report set to be released as investors assess the possibility of a rate cut
Investors are due for a flurry of economic reports, most of which were delayed due to the government shutdown. September data on producer prices, retail sales and home prices are due this morning, along with pending home sales for October and a report on the Conference Board’s consumer confidence index for November. The reports are likely to weigh on the possibility that traders are expecting an interest rate cut in December. The Federal Reserve has cut the benchmark rate at each of its last two meetings, but officials appear divided on whether another cut is needed. Still, as of Tuesday morning, traders are pricing in an 80% chance that the Fed will cut rates at its December policy meeting, up from 50% odds a week ago, according to CME Group’s FedWatch tracker. Optimism about a potential cut increased on Friday when the head of the New York Fed indicated he was open to cutting in the near term.
Nvidia shares fall after report Meta may use Google’s AI chips
Shares of Nvidia (NVDA) are falling in premarket trading following a report that its dominance in the artificial intelligence chipmaking industry could be at risk. technical news publication Information Facebook and Instagram parent Meta (META) are reportedly considering using AI chips designed and manufactured by Alphabet (GOOGL)-owned Google. The decision doesn’t seem to be happening yet, as Meta is making the decision for data centers that are expected to be finished in 2027, but other tech giants taking 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 surging Tuesday after jumping 13% Monday on news the maker of SD cards and other computer storage products was 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 take effect Friday, along with changes 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 index like the S&P 500, often gives shares a boost because 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 Chinese e-commerce company Alibaba (BABA) are rising on Tuesday after the company’s latest quarterly results largely topped estimates. Revenue rose 5% year-on-year to 247.8 billion Chinese yuan ($34.8 billion), while earnings per share came in at CNY1.09, well above the analyst consensus compiled by Visible Alpha. CEO Eddie Wu said the company has entered the investment phase to “drive long-term strategic value in AI technologies and infrastructure and build a consumption platform that integrates daily life services and e-commerce.” In February, the company said it expected to spend about $52 billion on its AI and cloud infrastructure over the next three years. Shares of US-listed Alibaba were up 3% before the opening bell.
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