U.S. stock futures climbed on Monday ahead of a busy week filled with important economic reports that could shape the Federal Reserve’s interest rate decisions in the months ahead. Meanwhile, artificial intelligence remains a central theme for investors, helping push the Nasdaq Composite to a record closing high last week.
Reports indicate that Nvidia (NASDAQ:NVDA), a leader in AI chips, will share a portion of its China sales revenue with the U.S. government. Meanwhile, C3.ai’s preliminary earnings announcement disappointed investors, signaling caution in the enterprise AI software space.
Futures on the Rise
By early Monday morning, futures contracts were up modestly across the board: Dow futures increased 108 points (0.2%), S&P 500 futures added 12 points (0.2%), and Nasdaq 100 futures gained 37 points (0.2%).
The Nasdaq Composite hit a new record close during Friday’s session, buoyed by Apple’s (NASDAQ:AAPL) stock soaring more than 13%—its best weekly performance since 2020. This gain was partly driven by hopes that Apple’s plans to boost domestic investment will help it avoid many of President Donald Trump’s tariffs. The S&P 500’s technology and communication services sectors also ended the week at fresh highs.
Investor optimism was further supported by expectations that a slowing U.S. labor market might prompt the Federal Reserve to lower interest rates at its September meeting (see more below).
Nvidia to Give U.S. Government Share of China AI Chip Revenue – Report
According to The New York Times, Nvidia has agreed to give 15% of its returns from AI chip sales in China to the U.S. government.
The paper, citing insiders, reported that Nvidia CEO Jensen Huang met President Trump last week and agreed to “grant Washington a cut of the money it rakes from its business in the large — and lucrative — Chinese market.” Advanced Micro Devices (NASDAQ:AMD) reportedly struck a similar deal.
Nvidia received licenses from the Commerce Department to begin sales of its China-specific H20 AI chip shortly after the meeting, despite the White House’s prior announcement last month of approval.
C3.ai Shares Drop Sharply
C3.ai (NYSE:AI) shares plunged in after-hours trading following a preliminary earnings report that fell short of expectations.
The company projected first-quarter revenue between $70.2 million and $70.4 million, with an adjusted loss of $57.7 million to $57.9 million, contrasting with analyst forecasts of $104 million revenue and a $27.3 million operating loss. C3.ai also disclosed it is reorganizing its sales and services operations.
The Redwood City-based firm will release its full quarterly results on September 3.
Key Economic Data This Week
Investors will closely monitor Tuesday’s July U.S. consumer price index report.
Additional data on producer prices is expected Thursday, with retail sales figures and consumer sentiment surveys due Friday.
Inflation and labor market conditions remain critical for the Fed’s dual mandate. Recent soft job growth and downward revisions for earlier months suggest a cooling labor market that could support rate cuts to encourage spending and investment.
However, inflation remains above the Fed’s 2% target, fueling concerns that rate reductions might worsen price pressures.
Fed’s Bowman Voices Support for Rate Cuts
The Fed has largely taken a cautious approach, waiting for clearer economic signals, especially about the impact of tariffs.
However, divisions are appearing among policymakers, with some showing openness to imminent rate cuts. Two officials dissented at July’s meeting, advocating reductions.
Fed Governor Michelle Bowman reiterated her stance on Saturday, saying the July jobs report “had underscored her worries around the state of the labor market.” She noted that “the softness in the jobs picture has outweighed any fears around spiking price gains.”
Her comments echo President Trump’s calls for the Fed to “quickly ratchet down rates,” a campaign that has drawn criticism toward Fed Chair Jerome Powell and raised questions about the central bank’s independence.
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