US stock futures saw a boost on Monday, driven primarily by technology stocks, as investors aimed to reignite a rally that had faltered amid skepticism regarding potential interest-rate cuts by the Federal Reserve. The Nasdaq 100 futures rose approximately 0.6%, while S&P 500 futures increased by 0.3%. Conversely, contracts for the Dow Jones Industrial Average remained largely unchanged, reflecting its lesser exposure to the tech sector.
Anticipation is mounting ahead of Nvidia’s earnings report scheduled for Wednesday. This event is typically met with close scrutiny, but heightened stakes surround it this time owing to uncertainties about the valuations of major tech players and significant investments in artificial intelligence. The chip manufacturer’s results and forward-looking statements will serve as a crucial test for Wall Street’s confidence in continued earnings growth and could determine whether the recent tech sell-off is merely a temporary setback.
In a positive development, Berkshire Hathaway has disclosed a near $5 billion investment in Alphabet, Google’s parent company. This strategic move, likely one of the last major decisions under Warren Buffett’s leadership, is singular given Berkshire’s cautious approach towards technology investments in the past. Following this announcement, Alphabet’s stock surged 5% in premarket trading.
Investors are also eagerly awaiting September’s jobs report, set to be released on Thursday. This follows the recent government shutdown, which has led to uncertainties regarding the full recovery of economic data. The upcoming labor market statistics will be particularly crucial, as the Federal Reserve’s recent more cautious tone has introduced doubts about potential rate adjustments in the near future.
This week’s earnings reports will provide insights into consumer health, especially as major retailers, including Walmart, Home Depot, Target, Lowe’s, and Gap, prepare to share their results.
In the cryptocurrency sphere, Bitcoin has experienced a notable decline, falling approximately 30% in just over a month—from a peak of over $126,000 to below $94,000 per token. This significant drop has caused Bitcoin to momentarily erase its gains for the year, a shift that reflects a growing risk-averse sentiment among investors.
In other news, Chinese electric vehicle manufacturer XPeng has forecasted fourth-quarter revenues that fell short of market expectations. The company attributed this forecast to a continuing price war and intense competition within China’s auto industry, which is the largest in the world. Despite having recorded high deliveries in October, XPeng’s US shares dropped by about 4% in premarket trading. The company expects its fourth-quarter revenues to be between 21.5 billion and 23 billion yuan, which is below the average analyst estimate of 26 billion yuan.
Reports also indicated that shares of Dell fell by 5% after Morgan Stanley downgraded several tech hardware manufacturers, including Dell. Meanwhile, shares of Marriott Vacations rose 3% following news that its Independent Chairman had purchased a significant amount of stock. In addition, HP Inc. saw a 3% decline under similar circumstances. Conversely, shares of Masimo rose 3% after a jury’s ruling that Apple must pay $634 million for a smartwatch patent infringement case.
Additionally, reports noted that Japanese retail and tourism stocks took a hit following a warning from China discouraging its citizens from traveling or studying in Japan amid ongoing diplomatic tensions. Lastly, oil prices dropped as Russia reopened a key port after a week-long closure, further impacting global market dynamics.
