U.S. stock futures were pointing slightly higher early Wednesday, suggesting equities may attempt a rebound after several sessions of sharp declines.
Some early support on Wall Street is likely to come from bargain hunters, with investors looking to scoop up shares that have been dragged lower during the recent sell-off.
On Tuesday, the major indexes closed at their weakest levels in a month as anxiety about a potential AI-driven bubble continued to grip the market.
That said, enthusiasm at the opening bell may be limited. Traders are bracing for earnings from one of the market’s most influential companies—a pivotal AI industry bellwether—set to report after today’s closing bell.
“Nvidia reports tonight and the slightest bit of news to disappoint investors has the potential to whip up a tornado across global markets,” said Russ Mould, investment director at AJ Bell. “Investors will be hanging on [CEO] Jensen Huang’s every word and looking for clues that big investment in AI is worth it.”
“Huang is an eternal optimist and Nvidia has a habit of smashing earnings expectations,” he added. “Therefore, investors might be digging deeper than usual into the numbers to spot any signs of weakness, rather than simply being swayed by the headline narrative.”
Caution may also prevail ahead of this afternoon’s release of minutes from the Federal Reserve’s latest policy meeting.
Investors will be scanning the document for clues on where interest rates may head next, especially as expectations for a December quarter-point rate cut have tapered off.
According to CME Group’s FedWatch Tool, the odds of a 25-basis-point cut next month currently sit around the 50–50 mark.
Despite a late-session attempt to trim losses, stocks finished Tuesday sharply lower. The declines added to Monday’s sell-off, pulling the major averages back to their lowest closes in roughly a month.
The Dow dropped 498.50 points, or 1.1%, to 46,091.74. The Nasdaq slid 275.23 points, or 1.2%, to 22,432.85, and the S&P 500 fell 55.09 points, or 0.8%, to 6,617.32.
Tech stocks were once again a major drag, exacerbated by continued weakness in Nvidia (NASDAQ:NVDA), which slid another 2.8% after falling 1.8% on Monday as investors wait for its quarterly results.
Given Nvidia’s enormous influence on market sentiment, both its earnings and its forward guidance could prove decisive in determining whether AI fears continue to rattle the market.
Looking ahead, traders are also preparing for key U.S. economic reports that were postponed during the recent government shutdown—most notably the September jobs report due Thursday.
In economic data released Tuesday, the Commerce Department said new orders for U.S. factory goods surged 1.4% in August, reversing July’s 1.3% decline. The increase matched economists’ expectations.
Hardware-related technology stocks were among the hardest hit, sending the NYSE Arca Computer Hardware Index down 3.7%. Semiconductors and software names also fell sharply, deepening the Nasdaq’s decline.
Retail stocks suffered notable weakness as well, mirrored by a 2.4% slump in the Dow Jones U.S. Retail Index.
Home Depot (NYSE:HD) weighed heavily on the group, plunging 6.0% after missing third-quarter earnings expectations and trimming its full-year outlook.
In contrast, energy stocks outperformed. A strong jump in crude prices helped lift the NYSE Arca Oil Index by 1.4%, allowing the sector to buck the broader market’s downward trend.