U.S. Stocks May See Further Downside In Early Trading

(RTTNews) - After coming under pressure over the course of the previous session, stocks are likely to see further downside in early trading on Tuesday. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.5 percent.

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.

Not long after the start of trading, the National Association of Home Builders is scheduled to release its report on homebuilder confidence in the month of November. The housing market index is expected to come in unchanged in November after surging to 37 in October.

The Commerce Department is also 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.

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.

In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Tuesday. Japan's Nikkei 225 Index plunged by 3.2 percent, while Hong Kong's Hang Seng Index dove by 1.7 percent.

The major European markets have also shown significant moves to the downside on the day. 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.

In commodities trading, 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.