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Nasdaq futures rise as Nvidia stabilizes after AI stocks rout
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Nasdaq futures rise as Nvidia stabilizes after AI stocks rout
Jun 25, 2024 3:41 AM

(Reuters) - Nasdaq futures climbed on Tuesday as Nvidia and other AI-linked stocks firmed after a bruising selloff, while investors awaited further cues on the monetary policy path based on remarks by U.S. Federal Reserve officials this week.

AI chip firm Nvidia advanced 2.1% premarket. Chip stocks Micron Technology, Broadcom and Qualcomm also recovered some lost ground, and were up more than 1% each, while AI-optimized server maker Super Micro Computer rose 2%.

"There has certainly been strong speculation in Nvidia's exponential surge since the beginning of last year ... strong rallies were often followed by sharp selloffs," Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said.

"It's too early to call the end of the Nvidia mania but given the high amount of speculation around the stock, we shall see the price action getting worse before it gets better."

The tech-heavy Nasdaq logged its steepest one-day fall, of more than 1%, since late April as investors pulled out of AI stocks and moved to other sectors, causing the blue-chip Dow to hit a one-month high on Monday.

At the start of the week, investors bought into sectors including utilities, consumer staples and energy that have underperformed tech and tech-adjacent stocks this year on continued AI optimism.

While the Fed's preferred inflation gauge, the personal consumption expenditures (PCE) price index report on Friday is at the top of the watch list, investors will also keep an eye out for consumer confidence data during the day.

Fed Board Governors Michelle Bowman and Lisa Cook, this year's voting committee members, are set to speak on Tuesday.

Market participants see 61% odds of a 25-basis point interest rate cut in September, and are eyeing around two cuts by the end of the year, according to LSEG's FedWatch data.

A slew of quarterly corporate earnings are also scheduled for the day, with cruise operator Carnival Corp due before market open and parcel delivery giant FedEx after the bell.

At 5:33 a.m. ET, Dow e-minis were down 14 points, or 0.04%, S&P 500 e-minis were up 9.75 points, or 0.18%, and Nasdaq 100 e-minis were up 83 points, or 0.42%.

Among other major premarket movers, Spirit AeroSystems dropped 5%. A report showed Boeing has offered to acquire the airplane fuselage maker in a deal funded mostly by stock that values its key supplier at about $35 per share.

Trump Media & Technology Group rose 14.2%, set to extend Monday's strong gains. The company had announced it expected $69.4 million in proceeds from cash exercise of warrants.

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