US stock index futures rose on Monday as technology and artificial intelligence-related shares steadied after a dismal October, with investors turning their attention to the midterm elections and corporate earnings.
Indiatimes reported that the Nasdaq-100 index, heavily weighted toward technology, dropped by more than $2.5 trillion in market capitalization during the previous month, bringing it close to correction territory. Investors grew wary of Big Tech’s soaring artificial intelligence spending while awaiting evidence of stronger returns.
Borrowing costs are climbing, making it harder to justify funding investments through debt, as several firms that recently entered the bond market to raise capital for those projects have shown.
🚨 Massive CRASH in AI Stocks in the Last 48 Hours$INTC: -32.9%$GOOGL: -14.5%$AMZN: -10%$SNDK: -15.8% This comes after disappointing earnings from major tech companies raised fresh concerns about AI spending and future growth. Intel: Its Q4 revenue guidance came in roughly… pic.twitter.com/ZkmiLN5OWT
At 7:01 a.m. ET, Dow E-minis were up 256 points, or 0.49 percent, while S&P 500 E-minis were up 35 points, or 0.46 percent. Nasdaq 100 E-minis advanced 212.5 points, or 0.74 percent, as most megacap and growth stocks rose in premarket trading.
Chip stocks recovered on renewed buying after Thursday’s brutal selloff. The tech-heavy Nasdaq Composite bounced 1.09 percent to close near 24,579.42, and the broad-market S&P 500 rose 0.31 percent to 7,376.86. The blue-chip Dow lost 237.33 points, or 0.46 percent, to settle at 51,285.73, as reported by CNBC.
Thursday marked the heaviest day of retail selling since the Covid pandemic, according to flow data cited by Capwolf. Retail participants did not rush back in to scoop up bargains as they had in previous cycles.
Liz Ann Sonders, chief investment strategist at the Schwab Center for Financial Research, stated that retail investors have not proven to be the dip buyers they have been in the past.
She noted there was a really heavy amount of net selling and that while the market may not fully be washed out yet, observers will have to see whether that retail trader at some point decides to step back in.
More of the same last week, as most stocks did ok overall, all things considered. Per @DualityResearch, avg stock down just over 1% and 351 beat the S&P 500. Of course, when 37% of the S&P 500 is tech and that crashes, hard not to feel 🤢 afterwards pic.twitter.com/TYrbQdVuix
Observing that both the Nasdaq and the Nasdaq-100 appeared oversold following substantial de-risking, Sonders pointed out that near-term attention should center on how corporations modify their capital expenditure strategies and what those shifts signal for forthcoming profit margins.
A proxy for Nvidia shares traded roughly 2 percent lower over the last 24 hours on Hyperliquid.
Intel extended losses, down about 1 percent, after clocking its worst one-day fall since the 1980s following a quarterly revenue forecast below market estimates and a statement that it does not expect positive cash flow this year. Rival AMD is set to report earnings later in the week, while Apple eased 0.4 percent ahead of its quarterly earnings due after the bell.
Investors are also looking ahead to key artificial intelligence-related earnings from CoreWeave, Cisco, and Applied Materials. Beyond pure artificial intelligence plays, Take-Two Interactive Software, Occidental Petroleum, KKR, Constellation Energy, and Skydance are scheduled to report quarterly earnings.
Tuesday’s United States midterm elections stand out as a primary catalyst this week, deciding whether President Donald Trump’s Republican Party will lose its grip on Congress to the Democrats. Democrats are widely predicted to win the House of Representatives, while the Senate remains more in doubt.
Midterm elections tend to be unfavourable events for the party in power and a Democratic victory in the House of Representatives would return the US to divided government, which would hardly be unusual.
Seth Meyer, global head of client portfolio management at Janus Henderson Investors