A trader works on the floor of the New York Stock Exchange on Aug. 4, 2022.
Source: NYSE
Stock futures rose on Monday as Wall Street tried to regain its footing after a week in which the artificial intelligence trade lost some steam.
Futures tied to the Dow Jones Industrial Average popped 171 points, or 0.4%. S&P 500 and Nasdaq-100 futures climbed 0.5% and 0.6%, respectively.
AI-related stocks Oracle and Nvidia rose after skepticism around the artificial intelligence trade put pressure on the broader stock market. Some traders even questioned whether there was enough energy to power an infrastructure plan between Nvidia and OpenAI. Nvidia rose around 1% in the premarket, while Oracle was higher by 0.8%.
Meanwhile, shares of Electronic Arts were halted after the video game company announced that it’s going to be taken private in a $55 billion deal.
U.S. stocks slipped last week as cracks appeared in a key pillar of the bull market rally — enthusiasm surrounding artificial intelligence buildout. The S&P 500 saw its worst weekly performance since Aug. 1, and now sits 0.8% off its record high. The Nasdaq recorded its weakest week since early August, and the Dow posted first loss in three weeks.
“The narrative shifted modestly last week in a negative direction as investors questioned two key assumptions underpinning the rally: the sustainability of the AI infrastructure boom and the inevitability of an aggressive Fed easing cycle,” Adam Crisafulli, founder of Vital Knowledge, said in a note.
All eyes are turning to the September nonfarm payrolls report, which is due Friday morning. Wall Street may need another “goldilocks” number to keep the bull market going — not too hot as to turn policymakers hawkish and not too cold to indicate a major slowdown.
Those on Wall Street are watching for a possible shutdown of the federal government as this week’s funding deadline looms. Over the weekend, President Donald Trump told NBC News that mass firings of federal workers could take place if a shutdown is not averted by Congress.
“We are going to cut a lot of the people that … we’re able to cut on a permanent basis,” he said, adding that he’d “rather not do that.”
The market is still poised for modest gains for the month of September. The S&P 500 is up 2.8% this month, while the Dow has gained 1.5%. The tech-heavy Nasdaq has been the outperformer with a 2.9% rally.