US stock futures fall amid tech spin, focus on lower investment rates

Investing.com– U.S. stock index futures fell in evening trade on Monday as a spin in heavy tech stocks weighed on Wall Street, although anticipation of interest rate cuts capped overall losses.

Tech sentiment soured this week ahead of AI darling NVIDIA Corporation’s (NASDAQ: ) quarterly earnings on Wednesday, where investors will be watching to see if the AI ​​trade remains in play.

Expectations that lower interest rates will spark an economic recovery have also spurred a rotation into more economically sensitive sectors.

fell 0.1 percent to 5,632.50 points, while it was down 0.1 percent to 19,572.50 points by 19:32 ET (23:32 GMT). decreased by 0.1% to 41,309.0 points.

Dow watches high amid tech pivot

It hit a record high on Monday as a spin in tech stocks favored the index’s constituents.

The Dow closed up 0.2% at 41,240.52. Losses in major technology stocks, notably Nvidia, sent the US500 down 0.3 percent to 5,616.84 points, while it fell 0.8 percent to 17,729.28 points.

Technology, Nvidia falls with earnings on tap

Tech stocks pulled back on Monday and were upset in aftermarket trade, with the focus squarely on Nvidia’s earnings on Wednesday.

Investors have been particularly leery of Nvidia after earnings from other tech heavyweights suggested that AI might not be the stellar driver of earnings as initially pegged.

Nvidia fell 2.3% on Monday and was flat in aftermarket trade. But while the stock has been pressured by a recent tech crisis, it has still traded up substantially – around 150% – so far this year.

The move is at the center of a massive surge in AI-driven ratings over the past year. But that rally has been seen undone in the past couple of months, at least in the broader tech sector.

Still, earnings from other major chipmakers, namely TSMC (NYSE: ) and ASML (NASDAQ: ), released in July suggested that at least the chipmaking sector was still poised to benefit from AI demand.

The focus is on the September rate cut, the 25 bps price cut

Stock market sentiment remained relatively bullish on the prospect of lower interest rates.

Dovish comments from Federal Reserve officials, particularly Chairman Jerome Powell, showed traders cut prices by at least 25 basis points in September.

But the Fed’s change of tone, which came amid signs of a severe labor market downturn, raised some concerns about slowing economic growth.