Futures Pointing To Continued Weakness On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a lower open on Tuesday, with stocks likely to see further downside after coming under pressure over the course of the previous session.

Weakness among technology stocks may continue to weigh on Wall Street amid a continued decline by market leader and AI darling Nvidia (NVDA).

Shares of Nvidia are slumping by 1.1 percent in pre-market trading after tumbling by 1.8 percent on Monday as traders look ahead to the release of the chipmaker's quarterly results after the close of trading on Wednesday.

The strength of Nvidia's results and its guidance could have a significant impact on the markets amid recent concerns about an AI bubble.

"As fears over an AI bubble build, there has rarely been more riding on an individual set of results than Nvidia's on Wednesday," said AJ Bell investment director Russ Mould. "Even a mild disappointment could reinforce the market's worries and spark a wider sell-off."

Speaking to BBC News, Alphabet (GOOGL) CEO Sundar Pichai said there has been some "irrationality" in the current AI boom and warned "no company is going to be immune" if the AI bubble were to burst.

Traders are also looking ahead to the release of some U.S. economic data that was delayed by the government shutdown, including the September jobs report on Thursday.

After showing a lack of direction early in the session, stocks moved sharply lower over the course of the trading day on Monday. The major averages all showed notable moves to the downside, falling to their lowest closing levels in a month.

The major averages climbed off their lows going into the end of the day but remained firmly negative. The Dow tumbled 557.24 points or 1.2 percent to 46,590.24, the Nasdaq slid 192.51 points or 0.8 percent to 22,708.07 and the S&P 500 slumped 61.70 points or 0.9 percent to 6,672.41.

The weakness on Wall Street came as valuation concerns resurfaced ahead of the release of quarterly results from Nvidia.

Nvidia, which is due to release its third quarter results after the close of trading on Wednesday, tumbled by 1.8 percent on the day.

"Just meeting expectation won't be enough - investors want the spectre of that AI bubble popping blown clean away," said AJ Bell head of financial analysis Danni Hewson. "Nvidia will need to surprise on the upside and provide an update that leaves people in no doubt about the outlook for the sector."

Traders were also looking ahead to the release of U.S. economic data that was delayed due to the recently ended government shutdown.

The Commerce Department kicked off the release its delayed data on Monday with the release of a report unexpectedly showing a modest increase by construction spending in the month of August.

While the reports will be more backward looking than traders would prefer, the data could still impact the outlook for interest rates ahead of the Federal Reserve's next monetary policy meeting in December.

Airline stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Airline Index down by 3.7 percent to its lowest closing level in over three months.

Significant weakness also emerged among financial stocks, with the NYSE Arca Broker/Dealer Index and the KBW Bank Index tumbling by 3.4 percent and 2.7 percent, respectively.

Housing stocks also saw considerable weakness, as reflected by the 2.7 percent slump by the Philadelphia Housing Sector Index.

Energy, networking and semiconductor stocks also saw notable weakness, while some strength emerged among utilities stocks.

Commodity, Currency Markets

Crude oil futures are rising $0.16 to $60.07 a barrel after slipping $0.18 to $59.91 a barrel on Monday. Meanwhile, after falling $19.70 to $4,074.50 an ounce in the previous session, gold futures are sliding $25.70 to $4,048.80 an ounce.

On the currency front, the U.S. dollar is trading at 155.13 yen compared to the 155.24 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is trading at $1.1598 compared to yesterday's $1.1590.

Asia

Asian stocks tumbled on Tuesday as risk aversion intensified ahead of upcoming Nvidia earnings and a slew of U.S. economic data, including the delayed jobs report, which will be released almost seven weeks behind schedule due to the government shutdown.

The dollar strengthened in the wake of increased uncertainty surrounding interest rates and tech valuations. Oil prices fell after loadings resumed at a key Russian port.

Gold slumped about 1 percent, extending losses for a fourth straight session, pressured by dollar strength and diminished expectations of a U.S. interest rate cut next month.

Chinese and Hong Kong markets fell as diplomatic tensions between China and Japan deepened. China's Shanghai Composite Index slid 0.8 percent to 3,939.81, with energy stocks pacing the decliners.

Hong Kong's Hang Seng Index plunged 1.7 percent to 25,930.03, dragged down by tech stocks on AI valuation concerns.

Japanese markets plummeted as tourism-related stocks continued to fall on China's travel alert. The Nikkei 225 Index nosedived 3.2 percent to 48,702.98, marking its biggest decline in more than seven months. The broader Topix Index settled 2.9 percent lower at 3,251.10.

Cosmetics giant Shiseido fell 2.9 percent and carrier ANA Holdings dropped 1.3 percent. Technology investor SoftBank Group lost 7.5 percent, semiconductor test equipment supplier Advantest declined 3.7 percent and Tokyo Electron gave up 5.5 percent.

The yen recovered from the lowest level since early February amid intervention fears. "We had candid, good talks on economic, price, financial developments as well as on monetary policy," Bank of Japan Governor Kazuo Ueda told reporters after his first bilateral meeting with Prime Minister Sanae Takaichi since she took office last month.

Seoul stocks plummeted as chip and other tech stocks fell on valuation concerns. The Kospi closed down 3.3 percent at 3,953.62 on heavy selling by institutions and offshore investors. Market heavyweight Samsung Electronics fell 2.8 percent and chip giant SK Hynix plunged 5.9 percent.

Australian markets lost ground to hit a five-month low as the Reserve Bank of Australia's November meeting minutes reflected caution over future interest rate cuts. The benchmark S&P/ASX 200 Index tumbled 1.9 percent to 8,469.10, dragged down by technology and material stocks. The broader All Ordinaries Index dove 2.0 percent to 8,738.30.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index ended 1.16 percent lower at 13,342.82.

Europe

European stocks have moved to the downside on Tuesday amid dwindling Fed rate cut bets and uncertainty over the U.S. economic outlook.

As financial risks mount, investors await cues from the delayed September U.S. jobs data and earnings from Nvidia for direction.

While the U.K.'s FTSE 100 Index is down by 1.3 percent, the French CAC 40 Index and the German DAX Index are both down by 1.5 percent.

Danish pharmaceutical company Novo Nordisk has slumped after an announcement that it would lower the U.S. price of its injectable Wegovy obesity drug.

Swiss engineering group ABB has also shown a significant move to the downside despite lifting its profitability targets.

French lender Credit Agricole has also moved notably lower after announcing its new medium-term plan, ACT 2028.

Bodycote, a provider of specialist thermal processing services, has also dropped after announcing a new divisional reporting structure.

Meanwhile, Roche Holding has surged as it reported positive Phase III results from the lidERA trial of investigational oral SERD giredestrant in ER-positive, HER2-negative early-stage breast cancer.

British tobacco company Imperial Brands has also jumped after reporting a nearly 5 percent increase in annual adjusted operating profit.

U.S. Economic News

The National Association of Home Builders is scheduled to release its report on homebuilder confidence in the month of November at 10 am ET. The housing market index is expected to come in unchanged in November after surging to 37 in October.

Also at 10 am ET, the Commerce Department is due to release its report on new orders for manufactured goods in the month of August. Factory orders are expected to jump by 1.4 percent in August after slumping by 1.3 percent in July.

Federal Reserve Governor Michael Barr is scheduled to speak on bank supervision at the Kogod School of Business Alan Meltzer Speaker Series at 10:30 am ET.

At 11 am ET, Richmond Federal Reserve President Thomas Barkin is due to speak before the Top of Virginia Economic Summit.

Dallas Federal Reserve President Lorie Logan is scheduled to deliver closing remarks before a "Global Perspectives with Gretchen Watkins" event at 7:55 pm ET.