The major index futures indicate a modestly higher opening on Wednesday, suggesting that stocks may recover some ground following a significant decline in recent sessions. Bargain hunting may contribute to initial strength on market, as some traders seek to acquire stocks at relatively reduced levels following the recent weakness. The major averages declined to their lowest closing levels in a month on Tuesday, reflecting ongoing apprehensions regarding a possible AI bubble. Early buying interest may be somewhat subdued, however, as traders look ahead to the release of earnings news from market leader and AI darling Nvidia after the close of today’s trading. “Nvidia reports tonight and the slightest bit of news to disappoint investors has the potential to whip up a tornado across global markets,” stated Russ Mould. “Investors will be closely analyzing Jensen Huang’s statements, seeking insights that will justify substantial investments in AI. Huang is an eternal optimist and Nvidia has a tendency to exceed earnings expectations,” he added. “Consequently, investors may be scrutinizing the data more thoroughly than normal to identify any indications of vulnerability, rather than merely being influenced by the overarching storyline.” Traders might exhibit caution in executing substantial transactions prior to the publication of the minutes from the Federal Reserve’s most recent monetary policy meeting this afternoon.
The Fed minutes could provide further insights into the trajectory of interest rates, particularly in light of a recent reduction in anticipations for an additional quarter-point rate cut at the central bank’s forthcoming meeting in December. Sources suggests that the likelihood of the Fed reducing rates by 25 basis points next month stands at approximately 50 percent for each outcome. Equities recovered a portion of their losses following an initial sell-off, yet concluded Tuesday’s session markedly lower. The major averages extended the significant losses recorded during Monday’s session, once more descending to their lowest closing levels in a month. The major averages concluded the day distinctly in negative territory. The Dow declined by 498.50 points, representing a decrease of 1.1 percent, closing at 46,091.74. The Nasdaq experienced a drop of 275.23 points, or 1.2 percent, finishing at 22,432.85. Meanwhile, the S&P 500 fell by 55.09 points, equivalent to a 0.8 percent decline, ending at 6,617.32. The ongoing weakness in technology stocks persisted, exerting pressure on market, particularly in light of Nvidia’s protracted decline. Shares of Nvidia experienced a decline of 2.8 percent following a drop of 1.8 percent on Monday, as market participants anticipate the forthcoming quarterly results from the chipmaker.
The robustness of Nvidia’s performance and its outlook may exert considerable influence on the markets, particularly in light of prevailing apprehensions regarding a potential AI bubble. Market participants are anticipating the forthcoming release of U.S. economic indicators that were postponed due to the government shutdown, notably the September jobs report scheduled for Thursday. A report indicating a notable recovery in new orders for U.S. manufactured goods during August. The report indicated that factory orders increased by 1.4 percent in August, following a decline of 1.3 percent in July. The rebound aligned with economist estimates. Computer hardware stocks exhibited some of the market’s most disappointing performances on the day, as evidenced by the NYSE Arca Computer Hardware Index’s decline of 3.7 percent. The semiconductor and software sectors experienced significant declines, further exacerbating the pronounced downturn of the tech-centric Nasdaq index. Beyond the technology sector, significant fragility was evident in retail equities, as demonstrated by the 2.4 percent decline in the Dow Jones U.S. Retail Index.
Home Depot helped lead the retail sector lower, tumbling by 6.0 percent after reporting weaker than expected third quarter earnings and cutting its full-year earnings guidance. Conversely, oil stocks defied the prevailing downtrend, propelled by a significant rise in crude oil prices, resulting in a 1.4 percent increase in the NYSE Arca Oil Index. The major U.S. index futures indicate a modestly higher opening on Wednesday, suggesting that stocks may recover some ground following a significant decline in recent sessions. Bargain hunting may contribute to initial strength on market, as some traders seek to acquire stocks at relatively reduced levels following the recent weakness. The major averages declined to their lowest closing levels in a month on Tuesday, reflecting ongoing apprehensions regarding a possible AI bubble. Early buying interest may be somewhat subdued, however, as traders look ahead to the release of earnings news from market leader and AI darling Nvidia after the close of today’s trading. Traders might exhibit caution in executing substantial transactions prior to the publication of the minutes from the Federal Reserve’s most recent monetary policy meeting this afternoon. The Fed minutes could provide further insights into the trajectory of interest rates, particularly in light of a recent reduction in anticipations for an additional quarter-point rate cut at the central bank’s forthcoming meeting in December. Reports suggests that the likelihood of the Fed reducing rates by 25 basis points next month stands at approximately 50 percent for each outcome.