By Ankika Biswas and Lisa Pauline Mattackal
(Reuters) – Nasdaq futures outperformed their peers on Tuesday, as Nvidia and other AI-linked stocks rallied after a massive sell-off while investors awaited further cues on the monetary policy path based on comments from U.S. Federal Reserve officials and fresh economic data this week.
AI chip company Nvidia gained 2.5% premarket after losing about 13% and $430 billion in market value over the past three trading days.
Micron Technology, Broadcom and Qualcomm gained more than 1%, while AI-optimized server maker Super Micro Computer added 1.7%.
The technology-heavy Nasdaq fell more than 1% on Monday, its biggest one-day drop since late April, as investors moved money out of AI-related stocks in favor of other sectors.
The Dow hit a one-month high on Monday as investors bought sectors including utilities and energy that have underperformed technology and technology-related stocks this year at the start of the week. Futures tracking the blue-chip index fell on Tuesday.
Technology and other growth stocks have driven the S&P 500 and Nasdaq to record highs this year, but the value-focused Dow has lagged far behind other indexes, leading some to worry about the sustainability of equity strength.
“The question investors now need to ask is whether the sell-off has extended far enough that the stock (Nvidia) is in correction territory, or is this a structural shift that will put pressure on the major US indices and allow other sectors and indices to take the lead,” said Kathleen Brooks, research director at XTB.
Data on the personal consumption expenditures (PCE) price index – the Fed's preferred inflation index – tops the watch list on Friday, while investors will also keep an eye on consumer confidence data during the day.
Fed Governor Michelle Bowman said inflation is still at elevated levels, and a stable policy rate is needed “for some time.” Lisa Cook, the other voting member of the FOMC, is also scheduled to speak on Tuesday.
According to FedWatch data from LSEG, market participants see a 61% chance of a 25 basis point interest rate cut in September, and are expecting about two cuts by the end of the year.
Several quarterly corporate earnings will also be announced during the day, with cruise operator Carnival Corp. set to report earnings before the market opens and parcel delivery giant FedEx due after the bell.
At 7:21 p.m. Eastern Time, Dow E-minis were down 31 points, or 0.08%, S&P 500 E-minis were up 11.75 points, or 0.21%, and Nasdaq 100 E-minis were up 96.25 points, or 0.49%.
Among other major premarket movers, Spirit AeroSystems fell 3.4%. A report showed Boeing has offered to buy the airplane fuselage maker in a deal, funded mainly by stock, that values its key supplier at about $35 a share. Boeing shares fell 1.1%.
Trump Media & Technology Group rose 7.8% and is expected to continue Monday's strong gains. The company announced it expects to receive $69.4 million in proceeds from the cash exercise of warrants.
(Reporting by Ankika Biswas and Lisa Mattakal in Bengaluru; Editing by Shounak Dasgupta and Maju Samuel)