US stock futures remained stable amidst growing uncertainty regarding Federal Reserve policy, even as the technology sector continued to forge ahead with significant advancements in artificial intelligence (AI). Futures tied to the Dow Jones Industrial Average edged up by 0.1%, while those linked to the S&P 500 and Nasdaq 100 showed little movement, hovering around the flatline.
The stock market experienced declines for two consecutive days, marking the end of a record-breaking rally that had been spurred by expectations of rate cuts and enthusiasm surrounding AI developments. Recent comments from Fed Chair Jerome Powell, along with statements from other central bank officials, unsettled Wall Street’s optimism about two anticipated rate cuts later this year.
In the tech sector, momentum remained robust as companies announced substantial investments in AI. Notably, Alibaba committed to exceeding $50 billion in AI-related spending, while Intel reportedly reached out to Apple in hopes of securing investment support for its ailing chip manufacturing business. Earlier in the week, Nvidia disclosed a groundbreaking partnership with OpenAI worth $100 billion, alongside a $5 billion investment in Intel.
Eyes will be on Costco as it prepares to report its earnings on Thursday. Analysts anticipate a notable increase in sales as consumers hunt for bargains amid prevailing economic uncertainties.
The market’s primary focus will shift to Friday’s release of the Federal Reserve’s preferred inflation measure, the Personal Consumption Expenditures (PCE) index. While Fed officials have expressed concerns about a slowdown in the labor market, investors are wary that a rapid rise in prices could prompt policymakers to rethink their stance on potential rate cuts.
