(Reuters) – Nasdaq futures rose on Tuesday as Nvidia and other artificial intelligence (AI) stocks held firm after a heavy sell-off while investors awaited further clues on the path of monetary policy from comments from Federal Reserve officials this week.
AI chip company Nvidia rose 2.1% in morning trading. Chip stocks from Micron Technology, Broadcom and Qualcomm also recovered losses, rising more than 1% each, while AI-optimized server maker Supermicro Computer Inc. rose 2%.
“There has certainly been strong speculation surrounding the surge in Nvidia shares since the beginning of last year, with strong gains often followed by sharp sell-offs,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
“It's too early to declare the end of the NVIDIA fever, but given the amount of speculation surrounding the stock, it's likely the stock will get worse before it gets better.”
The tech-heavy Nasdaq suffered its biggest one-day drop since late April of more than 1% as investors pulled out of AI-related stocks and moved into other sectors, while the blue-chip Dow Jones Industrial Average hit a one-month high on Monday.
Earlier this week, investors poured money into sectors such as utilities, consumer staples and energy, where technology and tech-related stocks have underperformed this year, spurred by continued optimism about AI.
The personal consumption expenditures (PCE) price index report, the Fed's go-to inflation gauge, is due on Friday, but investors will also be keeping an eye on consumer confidence data released during the day.
Federal Reserve Board members Michelle Bowman and Lisa Cook, who serve on this year's voting committee, are scheduled to speak on Tuesday.
According to FedWatch data from LSEG, market participants see a 61% chance of a 25 basis point cut in September and expect around two rate cuts by the end of the year.
Many companies are also scheduled to announce their quarterly earnings on the day, with cruise ship operator Carnival Corp. due to release its results before the market opens and delivery giant FedEx Corp. due to release its results after the close of trading.
As of 5:33 a.m. ET, the Dow e-mini was down 14 points (0.04%), the S&P 500 e-mini was up 9.75 points (0.18%) and the Nasdaq 100 e-mini was up 83 points (0.42%).
Among the big movers premarket, Spirit AeroSystems fell 5% after Boeing reportedly proposed to buy the aircraft fuselage maker in a deal that would be mostly funded with stock that values the key supplier at about $35 a share.
Trump Media & Technology Group rose 14.2% and is on track to extend its big gains on Monday after the company said it expects to raise $69.4 million from the cash exercise of its warrants.
(Reporting by Ankika Biswas in Bengaluru; Editing by Shaunak Dasgupta)
