The S&P futures traded in red, down by 1.75 points or 0.03%. The futures linked to the Dow Jones Industrial Average and Nasdaq edged lower. At the time of writing, the S&P 500 futures are marginally higher.
The lacklustre movements in futures followed the back-to-back losses in the S&P 500, with major tech stocks sliding. The S&P 500 (^GSPC) closed at 6,905.74, shedding 0.34%. Dow Jones Industrial Average (^DJI) fell by 0.51% to close at 48,461.93. The tech-dominated NASDAQ Composite (^IXIC) dropped by 0.50% to close in the red.
The major tech stock edged lower amid concerns about overstretched valuations and lingering fear of an AI bubble. The tech heavyweight NVIDIA Corporation (NVDA) retreated by 1.21%. Palantir Technologies Inc. (PLTR) fell by 2.40% to close at 184.18. Alphabet Inc. (GOOG) closed in the red, dropping by 0.18%. Oracle (ORCL), the tech major grappling with the slowdown of data center projects, finished in red, shedding 1.32%. Investors are taking a cautious approach towards Oracle’s stock, as the company’s capex expenditure estimates reached $50 billion.
Commenting on the tech stock pullbacks yesterday, Joe Mazzola, head trading & derivatives strategist at Charles Schwab, stated, “This is a reversal from last week when tech stocks led on the way up.”
Despite the current marginal retreats, mega tech stocks such as Nvidia, Palantir, Oracle, and Alphabet posted gains of 40.16%, 143.53%, 17.25%, and 65.09% Year-to-date (YTD), respectively, as of today.
The gold and silver futures continue to trade in green despite experiencing a brief pullback. The gold and silver futures are trading 0.85% and 4.95% up, respectively. Concerns about future export restrictions from China, one of the largest silver mining countries, are putting investors on edge. Nevertheless, the gold is likely to remain an investor favourite due to its safe-haven status. Along with gold, silver, and WTI crude oil posted gains following U.S.-Ukrainian talks.
While safe-haven assets, such as gold, are posting gains, the riskier crypto market is down. Bitcoin slipped to $87k, recording a monthly loss of 3.9% at the press time. The investors shying away from riskier asset classes reflect the widespread risk-off sentiment. The investors are now closely watching the minutes for the December meeting of the Federal Open Market Committee (FOMC), scheduled to be released later today.
The Investors Await Minutes of the Federal Open Market Committee
The December 10 minutes of FOMC are anticipated to give insights into the future direction of monetary policy. Wall Street analysts are expecting monetary easing in the upcoming year, with JP Morgan expecting a rate cut of another 50 basis points (bp). Yet, the leading bank further notes that the state of the labour market and upside risks stemming from AI could influence the Fed’s reaction.
The previous Federal Reserve minutes showed divergent viewpoints among policymakers, with officials holding differing views on the need for further interest-rate cuts. While some favored additional easing, others argued for keeping rates steady amid uncertainty over inflation trends and labor market conditions.
