U.S. stock futures are signaling a weaker start to Tuesday’s session, with equities poised to decline as markets reopen after the extended Presidents’ Day holiday weekend.
Technology shares are expected to remain a source of pressure, highlighted by a 0.9% drop in Nasdaq 100 futures.
Investor unease surrounding the rapid expansion of artificial intelligence infrastructure has recently triggered selling in major tech names, which had previously driven markets to record levels.
“Investors are increasingly questioning whether the marginal dollar spent on AI will generate the expected return,” said Daniela Hathorn, Senior Market Analyst at Capital.com. “At the same time, market uncertainty is rising as new AI models frequently disrupt established players.”
“With competitive dynamics evolving rapidly, it is unclear who the long-term winners will be,” she added. “This uncertainty has led to underperformance across much of big tech, even as the broader market remains relatively resilient.”
Trading volumes could remain relatively light as investors await key economic updates later this week.
Particular attention will be paid to the upcoming personal income and spending report for December, which includes the Federal Reserve’s preferred inflation indicators.
Minutes from the Fed’s most recent policy meeting are also due and may offer further guidance on the trajectory of interest rates.
On Friday, markets fluctuated throughout the day. After struggling for direction early on, stocks gained ground in afternoon trading before surrendering those gains into the close. The major indices ultimately finished narrowly mixed.
The Nasdaq declined 50.48 points, or 0.2%, to 22,546.67, extending Thursday’s sharp losses. Meanwhile, the S&P 500 edged up 3.41 points, or 0.1%, to 6,836.17, and the Dow Jones Industrial Average rose 48.95 points, or 0.1%, to 49,500.93.
For the week, the Nasdaq dropped 2.1%, while the S&P 500 and Dow fell 1.4% and 1.2%, respectively.
The volatile trading persisted despite the release of the closely watched January consumer price report from the Labor Department.
Data showed that consumer prices increased slightly less than expected month-over-month, and the annual inflation rate slowed more than analysts had forecast.
According to the report, the consumer price index rose 0.2% in January following a 0.3% gain in December. Economists had anticipated another 0.3% increase.
On a yearly basis, inflation eased to 2.4% from 2.7% in December, below expectations of 2.5%.
Core inflation, which excludes food and energy, climbed 0.3% in January after rising 0.2% the previous month, matching projections.
The annual core inflation rate dipped to 2.5% from 2.6%, also in line with estimates.
The softer headline inflation figures sparked renewed optimism about potential rate cuts and contributed to continued declines in Treasury yields.
“This print strengthens the case that the Federal Reserve can maintain a gradual easing bias without fearing renewed inflation pressure,” said Daniela Hathorn, Senior Market Analyst at Capital.com.
She added, “Importantly, while the labor market remains resilient, today’s CPI reduces the risk that strong employment data forces the Fed into a hawkish rethink.”
Nonetheless, concerns about the disruptive impact of AI investments continued to weigh on sentiment, limiting buying activity.
“Some are concerned about excessive levels of spending and others fear AI will disrupt multiple industries,” said Russ Mould, investment director at AJ Bell. “It all adds up to a cocktail of worries and that’s bad for market sentiment more broadly.”
While the broader market performance was subdued, gold-related stocks surged alongside rising bullion prices, pushing the NYSE Arca Gold Bugs Index up 5.6%.
Computer hardware shares also posted notable gains, with the NYSE Arca Computer Hardware Index advancing 2.7%.
Networking, utilities, natural gas, and transportation stocks also saw solid gains, whereas steel stocks declined following reports that President Donald Trump may scale back tariffs on steel and aluminum.