U.S. stock futures point to a modestly higher open on Wednesday, suggesting that equities could rebound after yesterday’s broad sell-off.
Investor confidence in the AI sector remains strong, continuing to drive market gains and record highs.
Shares of Nvidia (NASDAQ:NVDA) are showing early gains, rising 0.4% in pre-market trading after falling 2.8% on Tuesday. The semiconductor company, a leader in AI technologies, is expected to attract renewed buying interest.
Alibaba (NYSE:BABA) is surging 8.8% in pre-market trading after CEO Eddie Wu announced plans to increase investments in AI models and infrastructure. The company also unveiled new AI tools at its annual Alibaba Cloud conference, highlighting its expanding technological footprint.
Micron (NASDAQ:MU) is seeing some pre-market softness despite exceeding expectations for its fiscal fourth-quarter earnings and forecasting first-quarter revenue above analyst estimates due to AI-driven demand.
Trading volumes may remain light ahead of Friday’s key consumer price inflation report.
Tuesday saw major indices pull back after prior gains. The Nasdaq fell 215.50 points, or 1.0%, to 22,573.47, the S&P 500 lost 36.83 points, or 0.6%, to 6,656.92, and the Dow slipped 88.76 points, or 0.2%, to 46,292.78.
Market caution was influenced by Federal Reserve Chair Jerome Powell’s comments on potential overvaluation.
Speaking in Rhode Island, Powell said equity prices are “fairly highly valued” following the recent rally.
He added that the Fed faces a “challenging situation,” with upside risks to inflation and downside risks to employment.
“Two-sided risks mean that there is no risk-free path,” Powell said. “If we ease too aggressively, we could leave the inflation job unfinished and need to reverse course later to fully restore 2 percent inflation.”
He continued, “If we maintain restrictive policy too long, the labor market could soften unnecessarily. When our goals are in tension like this, our framework calls for us to balance both sides of our dual mandate.”
Nvidia’s retreat contributed to Nasdaq weakness, following its nearly 4% surge on Monday after announcing a strategic partnership with OpenAI to deploy at least 10 gigawatts of Nvidia systems for next-generation AI infrastructure.
Retail stocks dragged the Dow Jones U.S. Retail Index down by 1.2%, while software shares fell 1.2% in the Dow Jones U.S. Software Index.
Energy stocks remained strong, fueled by rising crude prices. The Philadelphia Oil Service Index jumped 3.5%, and the NYSE Arca Oil Index added 1.6%.
Alibaba Group Holdings stock price
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