Wall St futures drop as AI rally cools down; inflation data is in focus
?U.S. Stock index futures dipped on Tuesday, as the rally in chip stocks waned and investors lost hope for a quick resolution to the Middle East conflict. Investors also waited to see a crucial inflation report. Donald Trump declared that a ceasefire between the United States and Iran is "on life support", after Tehran rejected the U.S. proposal for ending the conflict. This kept oil prices high as the Strait of Hormuz, the main shipping route to the Middle East, remained closed. Crude futures rose nearly 3%. The market has been buoyed by a good earnings season, but the lack of progress in negotiations between Washington DC and Tehran is still a worry for many market observers. Rising oil prices are also fueling fears of a higher inflation. A consumer inflation report due at 8:30 a.m. ET will be closely scrutinized for any signs of wider price pressures. According to an economist survey, the consumer price index will have increased 0.6% in April after rising 0.9% in March.
Derren Nathan is the head of equity analysis at Hargreaves Lansdown. He said: "The risks are skewed towards a faster-than expected increase in prices. While headline numbers may not change the dial, an increased core number, could at least temporarily halt market optimism." After a rapid repricing of recent weeks, markets no longer price in policy easing for 2026. CME Group's FedWatch Tool showed that traders expected two rate reductions before the war. They also briefly priced in the possibility of a rate increase about a week into the conflict. This week will also see the release of retail sales and producer prices data. Investors are now looking for macroeconomic indicators as first quarter earnings season comes to an end.
At 7:10 a.m. At 07:10 a.m. ET, Dow E Minis were down 29?points, or 0.06 %, and S&P 500 E Minis were also down 28.5?points, or 0.38%. Nasdaq E-minis fell by 242 points, or 0.82%. All three major U.S. Stock indexes in the U.S. advanced on Monday. The S&P 500, and Nasdaq both reached new record highs. This was due to the continued optimism surrounding artificial intelligence, and?the state of Corporate America.
Most chip stocks traded lower on Tuesday before the bell, indicating that AI-related momentum has cooled. Intel shares fell 3.9% before the bell on Tuesday after gaining more than 17% over the past two sessions. ?Hims & Hers Health, a telehealth 'firm' that missed Wall Street expectations for first-quarter revenues?and reported a surprise loss?was among the other movers. GameStop dropped 4% when online marketplace eBay rejected its $56 billion bid to takeover the videogame retailer. eBay fell 0.6%.
Venture Global's shares rose by 8.5% after it raised its core annual profit forecast.
(source: Reuters)
