U.S. equity futures drifted lower early Tuesday, signaling another rough session after a global wave of risk-off sentiment hit stocks, commodities, and cryptocurrencies. The pullback comes as investors rethink whether the massive surge in enthusiasm for artificial intelligence can continue, with major U.S. benchmarks breaking below a widely watched technical threshold on Monday. Attention now turns to Home Depot’s quarterly update for clues on consumer strength and to Microsoft’s annual developer event, where the company’s AI expansion plans are expected to dominate.
Futures Point to Fresh Declines
By 03:12 ET, futures tied to the Dow were off 146 points (-0.3%), while SP 500 futures slipped 28 points (-0.4%) and Nasdaq 100 futures dropped 124 points (-0.5%).
The tone follows a sharp selloff the previous day, when all three major indices closed below their 50-day moving averages — a signal that traders often view as an early warning of weakening momentum.
Tech shares led Monday’s downturn. Nvidia (NASDAQ:NVDA), set to report key quarterly results later this week, lost 1.9%, dragging down Advanced Micro Devices (NASDAQ:AMD) and Super Micro Computer (NASDAQ:SMCI) as well.
Analysts at Vital Knowledge said investors appeared “jittery” and “nervous”, citing concerns that Amazon’s (NASDAQ:AMZN) $12 billion bond sale highlighted a growing reliance on debt to fund massive AI infrastructure build-outs.
Not even a fresh record high in Alphabet (NASDAQ:GOOG), supported by new investment from Warren Buffett’s Berkshire Hathaway (NYSE:BRK.B), could offset the broader sense of caution.
Waller Pushes Again for a Rate Cut in December
Markets briefly trimmed losses late Monday after Federal Reserve Governor Christopher Waller reiterated that he favors lowering interest rates at the December meeting.
Waller pointed to private payroll data — used as a stand-in during the federal shutdown — suggesting labor-market growth slowed to “stall speed” in September and October.
He argued that another 25-basis-point cut would “provide additional insurance against an acceleration” in the cooling employment backdrop.
However, many Fed officials remain unconvinced, insisting that more complete economic data is needed before supporting another move.
Home Depot Set to Kick Off a Heavy Retail Earnings Week
Home Depot (NYSE:HD) headlines today’s earnings calendar as retail names prepare to report amid growing uncertainty surrounding household budgets.
The home-improvement giant’s shares have fallen more than 8% in the last month, reflecting concerns about the housing slowdown and weaker demand for big-ticket renovation projects.
Higher input costs — driven in part by sweeping tariffs imposed under President Donald Trump — have weighed on margins at both Home Depot and its rival Lowe’s (NYSE:LOW). The companies have passed on more of those costs to consumers, though analysts believe the recent thaw in U.S.-China trade relations following talks between Trump and President Xi Jinping could help ease some pressures.
A looser monetary policy stance from the Fed may also encourage homeowners to restart deferred renovation plans.
Analysts expect Home Depot to report a 1.5% rise in comparable sales for the third quarter, reversing a 1.3% decline a year ago, according to LSEG data referenced by Reuters.
Microsoft Developer Conference Expected to Highlight Massive AI Infrastructure Plans
Microsoft (NASDAQ:MSFT) will open its annual developer gathering in San Francisco today, with Wall Street hoping for additional details on its aggressive expansion of AI-focused data centers.
The Wall Street Journal reported that the company aims to build next-generation, two-story AI “super factories” in Georgia, part of a broader plan to double its global data-center footprint within two years.
In its fiscal first quarter, Microsoft invested more than $34 billion in infrastructure, underscoring the scale of AI-related spending among major technology firms — a total that could exceed $400 billion this year.
Bitcoin Surrenders All 2025 Gains
Bitcoin (COIN:BTCUSD) briefly fell below $91,000 early Tuesday, extending a steep decline that has rattled the crypto market.
The world’s largest digital asset has now erased all of its gains for 2025 and sits more than 25% below the record high it set just over a month ago.
Analysts say uncertainty surrounding the U.S. economic outlook and shifting expectations for Federal Reserve rate cuts have dulled investor appetite for riskier assets. Bitcoin spot ETFs have also seen accelerating outflows as traders unwind bets tied to hopes of looser monetary policy.
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