Futures Pointing To Initial Rebound On Wall Street

The major U.S. index futures are currently pointing to a higher open on Tuesday, with stocks likely to regain ground following the weakness seen in the previous session.

Traders may look to pick up technology stocks at somewhat reduced levels following the sell-off seen in the sector during Monday’s trading.

Shares of Nvidia (NVDA) are surging by 3.3 percent in pre-market trading after the AI darling and market leader plunged by 17.0 percent in yesterday’s session.

Buying interest may be somewhat subdued, however, as traders look ahead to the Federal Reserve’s monetary policy announcement on Wednesday.

The Fed is almost universally expected to leave interest rates unchanged, but traders are likely to pay close attention to the accompanying statement for clues about the outlook for rates.

Recent economic data has led to concerns about the Fed leaving rates on hold for a prolonged period, but many economists still expect the central bank to resume cutting rates sometime in the first half of the year.

CME Group’s FedWatch Tool is currently indicating a 74.5 percent chance rates will be lower by at least a quarter point following the Fed’s June meeting.

U.S. stocks closed mostly lower on Monday, with those in the technology sector recording more pronounced losses due to sustained selling pressure throughout the day’s trading session.

Among the major averages, the Dow closed up 289.33 points or 0.7 percent at 44,713.58. The S&P 500 ended down 88.96 points or 1.5 percent at 6,012.28, while the Nasdaq plunged 612.47 points or 3.1 percent to 19,341.83.

Technology stocks tumbled on earnings concerns following China’s low-cost startup DeepSeek’s emergence as a powerful AI model. DeepSeek’s AI Assistant has overtaken ChatGPT on Apple’s App Store, sparking fears that U.S. AI leaders could lose their dominance.

DeepSeek’s ascendance has cast doubt on Silicon Valley’s hefty AI capex spending and the sustainability of the U.S. technical edge in artificial intelligence.

“Potentially, this technology could be a game-changer, and questions are being asked about the huge amounts of money the traditional tech players, the so-called Magnificent 7, have been ploughing into AI development,” said ING.

Nvidia shares plunged nearly 17 percent. Micron tumbled 11.7 percent, AMD closed down 6.4 percent, and Cisco closed lower by 5 percent. Alphabet, Intel, Tesla and Microsoft also ended sharply lower.

PepsiCo, Apple, Amgen, Costco, Meta Platforms, Microchip, AstraZeneca, Starbucks, PayPal and Texas Instruments closed with sharp to moderate gains.

Concerns about the outlook for interest rates also weighed on Wall Street ahead of the Federal Reserve’s monetary policy meeting.

On the economic front, new home sales in the U.S. surged by much more than expected in the month of December, according to a report released by the Commerce Department.

The report said new home sales shot up by 3.6 percent to an annual rate of 698,000 in December after soaring by 9.6 percent to an upwardly revised ate of 674,000 in November.

Economists had expected new home sales to climb 0.9 percent to an annual rate of 670,000 from the 664,000 originally reported for the previous month.

Commodity, Currency Markets

Crude oil futures are jumping $0.92 to $74.09 a barrel after tumbling $1.49 to $73.17 a barrel on Monday. Meanwhile, after plunging $40.50 to $2,378.40 an ounce in the previous session, gold futures are climbing $12.90 to $2,751.30 an ounce.

On the currency front, the U.S. dollar is trading at 155.39 yen compared to the 154.51 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0424 compared to yesterday’s $1.0492.

Asia

Asian stocks ended mostly lower in thin trading on Tuesday, with markets in China, South Korea, Taiwan and Indonesia closed for the Lunar New Year holidays.

Tariff worries persisted, with U.S. President Donald Trump’s Treasury Secretary pick Scott Bessent pushing for new tariffs and warning of a “calamity” for middle-class Americans if tax cuts expire at the end of this year.

The dollar strengthened against peers after Trump said he plans to impose sweeping tariffs on steel, aluminum, copper, semiconductor, and pharma imports in a push to increase U.S. production of the products.

Gold held steady in Asian trading, as investors awaited cues from this week’s Fed and ECB meetings. Oil recovered some ground but hovered near a two-week low after the release of weak economic data from China.

Japanese markets led regional losses amid a rout in technology shares battered by concerns over a recently launched Chinese artificial intelligence model.

The Nikkei 225 Index tumbled 1.4 percent to 39,016.87, while the broader Topix Index settled marginally lower at 2,756.90.

Softbank, an investment firm with major holdings in the technology sector, dove 5.2 percent, while Advantest plummeted 11.1 percent and Tokyo Electron shed 5.7 percent.

Hong Kong’s Hang Seng Index edged up by 0.1 percent to close at 20,225.11 in holiday-thinned trading. Alibaba Group Holding rose 1.2 percent and Tencent added 1.4 percent amid increased optimism over China’s AI capabilities.

Australian markets ended slightly lower ahead of the release of fourth quarter CPI data on Wednesday.

The benchmark S&P/ASX 200 slipped 0.1 percent to 8,399.10, with property developers, energy and tech stocks leading losses. The broader All Ordinaries Index ended down 0.2 percent at 8,644.50.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index fell 0.3 percent to 12,957.15.

Europe

European stocks have moved mostly higher on Tuesday as investors look ahead to upcoming Fed and ECB meetings.

On a light day on the economic front, data showed a measure of French consumer confidence rose to 92 in January from 89 in the previous month.

The Spanish Economy Ministry said it would raise its gross domestic product growth target for this year above the current 2.4 percent.

The German DAX Index is up by 0.8 percent, the U.K.’s FTSE 100 Index is up by 0.6 percent and the French CAC 40 Index is up by 0.5 percent.

German media company Freenet AG rose over 1 percent after appointing Robin John Andes Harries as its new CEO.

Energy technology group Siemens Energy rallied 3 percent after reporting increased sales and earnings figures for the first quarter and raising part of its forecast for the 2024/25 financial year.

Basilea Pharma added 1.3 percent. The commercial-stage biopharmaceutical company announced that the total global in-market sales of its leading antifungal Cresemba increased 20 percent year-on-year to $533 million in the twelve-month period between October 2023 and September 2024.

SAP SE gained half a percent. The business-software group raised its operating profit and sales guidance for the year.

SThree fell 2.5 percent in London after fiscal 2024 profit before income tax declined to 67.64 million pounds from 77.91 million pounds in the prior year.

French engineering and technology consulting group Alten SA jumped 9 percent after 2024 revenue increased by 1.8 percent.

Netcompany Group A/S plunged 17 percent after fourth quarter revenue came in below expectations.

U.S. Economic News

A report released by the Commerce Department on Tuesday unexpectedly showed a steep drop by new orders for U.S. manufactured durable goods in the month of December amid a nosedive by orders for transportation equipment.

The Commerce Department said durable goods orders plunged by 2.2 percent in December after tumbling by a revised 2.0 percent in November.

Economists had expected durable goods orders to climb by 0.8 percent compared to the 1.2 percent slump that had been reported for the previous month.

However, excluding the steep drop by orders for transportation equipment, durable goods orders rose by 0.3 percent in December after edging down by 0.2 percent in November. Ex-transportation orders were expected to increase by 0.4 percent.

At 9 am ET, Standard & Poor’s is scheduled to release its report on home prices in major metropolitan areas in the month of November.

The Conference Board is due to release its report on consumer confidence in the month of January at 10 am ET. The consumer confidence index is expected to climb to 106.3 in January after falling to 104.7 in December.

At 1 pm ET, the Treasury Department is scheduled to announce the results of this month’s auction of $44 billion worth of seven-year notes.