Wall Street’s main indexes were set for a muted open on Monday, heading into a packed week that includes AI bellwether Nvidia’s results and the resumption of government data releases, while Alphabet shares rose after Berkshire Hathaway disclosed a stake.
Google-parent Alphabet gained 3.9 per cent in premarket trading after Berkshire revealed a new $4.3 billion stake in the company and further reduced its stake in Apple .
Apple fell 1.2 per cent, making it one of the laggards among megacap and growth stocks.
Nvidia’s results, due after markets close on Wednesday, will test the sustainability of a stunning rally this year in AI-related stocks, with some investors already pointing to stretched valuations and signs of a bubble. The chipmaker’s shares were down 1.6 per cent.
“Whenever a beloved AI name dips, (investors have) been piling in … and you have to ask yourself who are the true believers and how much money do they have,” said Kim Forrest, chief investment officer at Bokeh Capital Partners.
“It feels like we’re getting to a point where one or the other is running out.”
At 08:31 a.m. ET, S&P 500 E-minis were down 7.75 points, or 0.11 per cent, Nasdaq 100 E-minis were down 23.75 points, or 0.09 per cent, Dow E-minis were down 66 points, or 0.14 per cent.
RETAIL GIANTS TO REPORT
The quarterly earnings season will start to thin out this week, though not before earnings from retail giants Walmart , Home Depot and Target.
Of the 456 S&P 500 companies that have reported earnings for the quarter, 82.7 per cent topped profit estimates compared with a long-term average of 67.2 per cent, according to data compiled by LSEG.
With the longest government shutdown in U.S. history officially having ended last week, key data releases from government agencies are expected in the next few days.
The much-delayed September jobs report will also be released on Thursday, but may do little more than confirm earlier private market surveys showing a slowing labor market.
Traders currently see a more than 56 per cent chance that the Federal Reserve will hold its rate steady in December compared with a near 94 per cent chance of a 25-basis-point cut seen a month ago, according to the CME FedWatch Tool.
On Monday, at least four Fed speakers including Governor Christopher Waller and New York Fed President John Williams are slated to speak throughout the day.
Minutes from the Fed’s October meeting – where it cut rates by an expected 25 basis points – are due on Wednesday.
U.S. stocks have run into turbulence of late as investors fretted about the pace of rate cuts and elevated valuations of heavyweight technology stocks that have been one of the key drivers of markets this year.
Among other movers, shares of Clearwater Analytics rose 10.1 per cent after reports private equity firms Warburg Pincus and Permira were in talks to buy the investment and accounting software maker.
Dell Technologies dropped 5.9 per cent after Morgan Stanley double-downgraded its rating on the AI server maker to “underweight” from “overweight”.
In Europe at midday, Germany’s DAX fell 0.6 per cent, while the CAC 40 in Paris slipped 0.5 per cent. Britain’s FTSE 100 was 0.2 per cent lower.
In Asian trading, Tokyo’s Nikkei 225 fell 0.1 per cent to 50,323.91 after the government reported that the Japanese economy contracted at a 1.8 per cent annual pace in the July-September quarter.
The dollar rose against the Japanese yen, climbing to 154.86 yen from 154.58 yen.
Chinese markets also slipped, as Hong Kong’s Hang Seng shed 0.7 per cent to 26,384.28. The Shanghai Composite index declined 0.5 per cent to 3,972.03.
Geopolitical tensions have dimmed investor sentiment in East Asia, as relations between China and Japan have deteriorated due to a spat following Prime Minister Sanae Takaichi’s suggestion that a Chinese move against self-governing Taiwan could prompt a Japanese military response.
China objects to other countries’ involvement in Taiwan, which Beijing claims it as its own and destined to come under its control. The Chinese government has warned its citizens not to travel to Japan or study there.
“China’s escalation against Japan over Prime Minister Takaichi’s Taiwan remarks has moved from a diplomatic irritant to a consequential macro input, with markets now forced to reprice Asia’s near-term risk curve,” Stephen Innes of SPI Asset Management said in a commentary.
In South Korea, the Kospi gained 1.9 per cent to 4,089.25 on buying of tech-related shares. Computer chipmakers have rallied after they formed plans with industry leader Nvidia to cooperate in developing artificial intelligence, with SK Hynix surging 8.2 per cent on Monday and Samsung Electronics up 3.5 per cent.
Australia’s S&P/ASX 200 was nearly unchanged at 8,636.40.
In Taiwan, the Taiex picked up 0.2 per cent, while India’s Sensex gained 0.5 per cent.
In energy trading, U.S. benchmark crude oil picked up 14 cents to $60.23 per barrel. Brent crude, the international standard, gained 13 cents to $64.52 per barrel.
Reuters and The Associated Press
