Dow Jones, S&P 500 and Nasdaq futures point lower as rising crude oil prices and AI debt concerns pressure markets ahead of key earnings from Tesla, Meta, and SpaceX.
The major U.S. index futures are currently pointing to a lower open on Tuesday, with stocks likely to move back to the downside following yesterday’s rebound, extending recent volatility.
Technology stocks may come under renewed selling pressure after helping lead the markets higher during Monday’s session.
Concerns about AI-related debt may weigh on the sector once again, with a report from Goldman Sachs saying it is projecting $420 billion of global hyperscaler debt issuance in 2027, representing a more than 60 percent increase from its 2026 estimate.
The downward momentum on Wall Street also comes amid an extended surge by the price of crude oil, with U.S. crude oil futures jumping by more than 1 percent.
The price of crude oil had skyrocketed as much as 6.6 percent earlier in the day due to Houthi attacks on Saudi Arabian infrastructure and reports of vessel attacks in the Gulf.
However, trading activity may be somewhat subdued ahead of the release of earnings from key tech companies like SpaceX (NASDAQ:SPCX), Tesla (NASDAQ:TSLA) and Meta (NASDAQ:META).
“The mounting concern about the artificial intelligence trade raises the stakes ahead of earnings updates from some of the key participants including SpaceX tonight and Tesla and Meta later this week,” said AJ Bell investment director Russ Mould.
Following the sell-off seen during last Friday’s session, stocks moved back to the upside during trading on Monday. Technology stocks helped lead the way higher, resulting in a notable rebound by the tech-heavy Nasdaq.
The Nasdaq ended the day well off its highs of the session but still jumped 290.85 points or 1.1 percent to 26,430.89. The S&P 500 also climbed 31.29 points or 0.4 percent to 7,690.73, while the narrower Dow bucked the uptrend and edged down 36.38 points or 0.1 percent to 51,966.03.
The strength on Wall Street came amid a rebound by technology stocks, which moved back to the upside after seeing substantial weakness in the previous session.
Bargain hunting may have contributed to the strength in the sector after the Nasdaq slumped to its lowest closing level in a month.
Computer hardware stocks turned in some of the tech sector’s best performances, with the NYSE Arca Computer Hardware Index surging by 2 percent after plunging to a two-month closing low last Friday.
Significant strength was also visible among semiconductor stocks, as reflected by the 1.6 percent jump by the Philadelphia Semiconductor Index.
Outside of the tech sector, retail stocks showed a strong move to the upside, driving the Dow Jones U.S. Retail Index up by 2.2 percent to its highest closing level in well over a month.
Meanwhile, telecom stocks saw considerable weakness on the day, with the NYSE Arca North American Telecom Index slumping by 2 percent.
Utilities, brokerage and airline stocks also showed notable moves to the downside, limiting the upside for the broader markets.
On the U.S. economic front, a report released by the National Association of Home Builders showed a bigger-than-expected deterioration in U.S. homebuilder sentiment in the month of October.
The report said the NAHB/Wells Fargo housing market index fell to 29 in October from 32 in September. Economists had expected the index to edge down to 31.
With the bigger-than-expected decrease, the housing market index dropped to its lowest level since hitting a matching figure in June 2012.