US stock index futures recorded moderate gains as investors focused on current market sentiment driven by expectations for major technology companies’ earnings reports and the Fed’s monetary policy decision.
At around 8:24 am, S&P 500 Futures rose 0.2% to 7,185.75 points. Nasdaq 100 Futures rose 0.4% to 27,278.0 points, while Dow Jones Futures also rose 0.2% to 49,407.0 points.
However, the previous trading session saw significant pressure as the S&P 500 fell 0.5%, the Nasdaq Composite fell 0.9%, while the Dow Jones Industrial Average fell 0.1%. The decline was driven by weakness in technology stocks that had previously led the market’s rise.
Negative sentiment was also influenced by renewed concerns about the demand for artificial intelligence (AI).
The Wall Street Journal reported that OpenAI failed to meet revenue and internal user targets, raising questions about the sustainability of large-scale spending in the data center and AI infrastructure sector.
Selling pressure was clearly focused on semiconductor and AI-related stocks, including Nvidia, Advanced Micro Devices and Broadcom, which each recorded declines.
Meanwhile, oil prices remained high after a surge in the previous session due to ongoing disruptions in the Strait of Hormuz.
Geopolitical developments also became a concern as Donald Trump said Iran was unstable and sought to reopen the strategic waterway.
Investors' attention now turns to the earnings reports of the "Magnificent Seven" group that forms the backbone of the US equity market. Among the major companies scheduled to report results are Microsoft, Meta Platforms, Amazon and Alphabet, followed by Apple at the end of the week.
The market will assess whether these companies can support large capital expenditures in the AI sector, especially after increased volatility in technology and semiconductor stocks recently.
In a separate development, the Fed has begun a two-day policy meeting, with the decision expected to keep interest rates unchanged.
However, statements from Chairman Jerome Powell will be the determining factor in market direction, particularly regarding the outlook for inflation and economic growth amid rising oil price pressure due to geopolitical tensions in the Middle East.
