Dow Jones futures advance as market eyes inflation data, tech earnings
- Traders await key CPI data for inflation signals while tracking CoreWeave’s upcoming earnings for broader AI demand insights.
- Wall Street aims to maintain momentum following Monday's major rally led by strong broad-based semiconductor gains.
- Nvidia shares dropped over 4% amid CEO controversy and fears of stricter AI chip export restrictions.
Dow Jones futures advance 0.48% to trade around 52,750 during the European hours on Tuesday. Meanwhile, S&P 500 futures gain 0.17% to trade around 7,590 and Nasdaq 100 futures decline 0.15% to trade around 27,970.
US stock futures traded mixed as investors awaited the October Consumer Price Index (CPI) report. Headline CPI is forecast to rise by 0.3% month-over-month, half the 0.6% pace recorded in September, while core CPI is expected to moderate to 0.2% from 0.3%.
However, the Bureau of Labor Statistics (BLS) will not publish 12-month percentage changes for the October 2026 indexes because data for October 2025 were never collected due to the federal government shutdown. As a result, standard annual headline and core inflation rates will be unavailable. In light of the incomplete inflation metrics, market participants shifted additional focus to neocloud firm CoreWeave’s upcoming earnings release for critical signals on the momentum of the artificial intelligence sector.
The cautious tone followed a sharp rally during Monday’s regular session, where the Dow gained 2.15%, the S&P 500 rose 2.35%, and the Nasdaq Composite climbed 2.74%. Semiconductor stocks led the rebound from last week’s steep selloff, which was triggered by concerns over tighter AI oversight and potential delays in data center expansion after Democrats secured control of Congress.
However, company-specific headwinds capped sentiment, particularly for Nvidia. Shares of the chipmaker dropped over 4% after CEO Jensen Huang acknowledged an alleged affair with a suspected Chinese spy, sparking fears that lawmakers might push for stricter export controls on the company's hardware.
US equities rebound as tech and semiconductors lead recovery
Analysts at Rabobank note that US equities have begun to claw back losses following the post-Midterm election sell-off. They highlight that, after "collapsing 4.4% in one day last week following the US Midterm elections, the S&P 500 is starting to show signs of recovery, having moved 3% higher, back to pre-November 4 levels." The tech-heavy Nasdaq has also staged a notable rebound; Rabobank points out that, "despite the unfortunate headlines surrounding Jensen Huang, the Nasdaq also made a strong recovery, having moved 5% higher over the past two sessions, supported by the Philadelphia Semiconductor Index, which managed to work its way more than 11% higher."
AI stocks FAQs
First and foremost, artificial intelligence is an academic discipline that seeks to recreate the cognitive functions, logical understanding, perceptions and pattern recognition of humans in machines. Often abbreviated as AI, artificial intelligence has a number of sub-fields including artificial neural networks, machine learning or predictive analytics, symbolic reasoning, deep learning, natural language processing, speech recognition, image recognition and expert systems. The end goal of the entire field is the creation of artificial general intelligence or AGI. This means producing a machine that can solve arbitrary problems that it has not been trained to solve.
There are a number of different use cases for artificial intelligence. The most well-known of them are generative AI platforms that use training on large language models (LLMs) to answer text-based queries. These include ChatGPT and Google’s Bard platform. Midjourney is a program that generates original images based on user-created text. Other forms of AI utilize probabilistic techniques to determine a quality or perception of an entity, like Upstart’s lending platform, which uses an AI-enhanced credit rating system to determine credit worthiness of applicants by scouring the internet for data related to their career, wealth profile and relationships. Other types of AI use large databases from scientific studies to generate new ideas for possible pharmaceuticals to be tested in laboratories. YouTube, Spotify, Facebook and other content aggregators use AI applications to suggest personalized content to users by collecting and organizing data on their viewing habits.
Nvidia (NVDA) is a semiconductor company that builds both the AI-focused computer chips and some of the platforms that AI engineers use to build their applications. Many proponents view Nvidia as the pick-and-shovel play for the AI revolution since it builds the tools needed to carry out further applications of artificial intelligence. Palantir Technologies (PLTR) is a “big data” analytics company. It has large contracts with the US intelligence community, which uses its Gotham platform to sift through data and determine intelligence leads and inform on pattern recognition. Its Foundry product is used by major corporations to track employee and customer data for use in predictive analytics and discovering anomalies. Microsoft (MSFT) has a large stake in ChatGPT creator OpenAI, the latter of which has not gone public. Microsoft has integrated OpenAI’s technology with its Bing search engine.
Following the introduction of ChatGPT to the general public in late 2022, many stocks associated with AI began to rally. Nvidia for instance advanced well over 200% in the six months following the release. Immediately, pundits on Wall Street began to wonder whether the market was being consumed by another tech bubble. Famous investor Stanley Druckenmiller, who has held major investments in both Palantir and Nvidia, said that bubbles never last just six months. He said that if the excitement over AI did become a bubble, then the extreme valuations would last at least two and a half years or long like the DotCom bubble in the late 1990s. At the midpoint of 2023, the best guess is that the market is not in a bubble, at least for now. Yes, Nvidia traded at 27 times forward sales at that time, but analysts were predicting extremely high revenue growth for years to come. At the height of the DotCom bubble, the NASDAQ 100 traded for 60 times earnings, but in mid-2023 the index traded at 25 times earnings.