Wall Street futures slipped early Wednesday, reversing their initial gains as investors stayed cautious ahead of Nvidia’s earnings report and the release of the Federal Reserve’s October meeting minutes.
Technology stocks continued to face pressure. Concerns over stretched artificial intelligence valuations weighed heavily, while fading expectations of a December Fed rate cut added to the risk-off mood.
Retail stocks also pulled back after Home Depot reported weak earnings. Several major retailers are set to announce results later this week.
By 00:00 ET (05:00 GMT), S&P 500 futures were down 0.2% at 6,629.50, while Nasdaq 100 futures fell 0.3% to 24,534.50. Dow Jones futures dipped 0.1% to 46,124.0.
Tech slide deepens as Nvidia earnings near
Tech shares fell sharply on Tuesday. NVIDIA (NASDAQ: NVDA) slid 2.8% as markets grew more cautious ahead of its results due after Wednesday’s close.
While Nvidia is expected to post strong numbers, investors are focused on whether the company can justify its near $5 trillion valuation and offer upbeat guidance on AI demand. Markets are hoping for a clear beat-and-raise performance from the sector leader.
Doubts over AI-driven valuations have dragged on tech stocks in recent weeks. Investors are questioning whether the AI boom has inflated a bubble. Nvidia remains central to the massive AI-powered surge over the past three years.
Other major tech names dropped as well. AMD fell 4.3%, TSMC dipped 1.5%, Amazon lost 4.4%, and both Palantir and Microsoft declined between 2% and 3%.
Retail stocks were also under pressure. Home Depot tumbled 6% after its report. Lowe’s dropped 2.3%, Walmart slipped 1.5%, and Target traded flat ahead of its earnings.
On Tuesday, the S&P 500 fell 0.8% to 6,617.37, the Nasdaq Composite dropped 1.2% to 22,432.85, and the Dow Jones Industrial Average slid 1.1% to 46,091.68.
December rate-cut bets fade as Fed minutes arrive
Markets also retreated as traders scaled back expectations for a December rate cut. According to CME FedWatch, the probability of a 25 bps cut at the December 10–11 meeting fell to 43.4%, down from 61.9% last week.
Delays in key economic reports, caused by an extended U.S. government shutdown, have left the Federal Reserve with limited data. This increases the odds of the central bank holding rates steady.
Investors are watching Wednesday’s release of the Fed’s October meeting minutes for clues on policy direction. Although officials largely supported a rate cut during that meeting, recent comments hint at growing internal disagreement.
Any division within the Fed could strengthen the case for a pause, as policymakers have warned about ongoing economic uncertainty.
The next major data release is Thursday’s nonfarm payrolls report, which will offer important insight into the labor market—another key factor guiding the Fed’s rate decisions.
