Wall Street futures erased early gains and turned lower in Asian trading on Tuesday as investors grew cautious ahead of Nvidia’s earnings and the long-delayed September nonfarm payrolls report.
Futures initially rose after Federal Reserve Governor Christopher Waller signaled support for additional interest rate cuts to help the labor market. However, the optimism faded quickly as sentiment around major technology stocks remained weak and expectations continued to tilt toward a December rate hold.
By 23:30 ET (04:30 GMT), S&P 500 futures were down 0.6% at 6,650.75, Nasdaq 100 futures dropped 0.8% to 24,672.75, and Dow Jones futures slipped 0.4% to 46,460.0.
Tech Weakness Drags Wall Street as Nvidia Results Approach
U.S. markets finished sharply lower on Monday. Investors continued trimming exposure to large tech names ahead of Nvidia’s quarterly report, set for release Wednesday. Nvidia shares fell 1.9%, extending recent declines as traders locked in substantial profits after years of AI-driven gains.
Other major tech stocks also retreated on concerns about the long-term profitability of massive AI spending. Palantir slid 1.6%, down nearly 10% over the past week.
One bright spot was Alphabet, which rose 3.1% after Berkshire Hathaway revealed a $4.3 billion stake. Anticipation surrounding Google’s upcoming Gemini 3.0 AI model also boosted the stock, with prediction markets expecting a release on Tuesday.
Even outside tech, cyclicals weakened as worries about the U.S. economy and rising global bond yields weighed on sentiment. Concerns over large fiscal spending added to the pressure.
On Monday, the S&P 500 fell 0.9% to 6,672.50, the Nasdaq Composite dropped 0.8% to 22,708.08, and the Dow Jones Industrial Average lost 1.2% to 46,590.49.
Investors are also preparing for earnings from major U.S. retailers including Walmart, Target, and Home Depot later this week.
Markets Await September Jobs Data as Rate Cut Bets Decline
This week’s focus also centers on U.S. economic data delayed by October’s government shutdown. The September nonfarm payrolls report, now due Thursday, will be a crucial indicator for the Fed’s December policy meeting.
Waller reiterated that rate cuts may be needed to prevent further weakness in the labor market. However, both his comments and the incoming data come at a time when bets on a December rate cut have continued to fade. The backlog of postponed labor and inflation releases has raised concerns that the Fed is heading into its December meeting with limited visibility.
According to the CME FedWatch tool, markets now assign a 40.8% chance of a 25-basis-point cut, down from 55.4% last week. Expectations for the Fed to hold rates steady have risen to 59.2%.
