Key Market Movements and Economic Data Awaited

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Stock futures are largely unchanged this morning following a significant rise in major indexes at the start of the holiday-shortened trading week. A series of economic data, which could influence interest rate projections, is expected today. Nvidia shares are declining after reports suggest Meta may opt for Google's AI chips. Meanwhile, tech manufacturer Sandisk is set to join the S&P 500 by the week's end, boosting its stock, and Alibaba shares are gaining following the release of its earnings report. Here are the key developments to note today.

Stock Futures Holding Steady After Monday's Rally

Stock futures are relatively stable as investors anticipate a series of economic data reports scheduled for release today. Major indexes closed significantly higher on Monday, led by a surge in tech stocks, after experiencing declines last week due to concerns about a potential AI bubble. Futures linked to the Dow Jones Industrial Average and the S&P 500 are fluctuating between slight gains and losses, while those tied to the Nasdaq are down 0.1%. Bitcoin, which also saw an increase yesterday, is currently trading at $87,400, down from an overnight peak of just above $89,000. Gold futures have risen 0.9% to $4,130 per ounce, while crude oil futures have slightly decreased to approximately $58.60 per barrel. The yield on the 10-year Treasury note, which influences borrowing costs across various consumer loans, stands at 4.03%, down from 4.04% late yesterday, marking its lowest level in a month.

Economic Reports Set for Release as Investors Assess Likelihood of Rate Cut

Investors are poised to receive a range of economic reports, many of which were postponed due to the government shutdown. September data on producer prices, retail sales, and home prices are expected this morning, along with an October report on pending home sales and the Conference Board's consumer confidence index for November. These reports are likely to impact the perceived probability of an interest rate cut in December. The Federal Reserve has reduced its benchmark rate in its last two meetings, but officials remain divided on the necessity of another cut. As of Tuesday morning, traders are pricing in an 80% probability of a rate cut at the Fed's December policy meeting, up from the 50% odds a week ago, according to the CME Group's FedWatch tracker. Optimism regarding a potential cut increased on Friday after the head of the New York Fed expressed openness to a near-term reduction.

Nvidia Shares Drop on Report Meta Might Use Google's AI Chips

Nvidia (NVDA) shares are declining in premarket trading following a report suggesting its dominance in the AI chipmaking industry might be challenged. Tech news outlet The Information reported that Meta (META), the parent company of Facebook and Instagram, is considering using AI chips designed and manufactured by Google's parent company, Alphabet (GOOGL). Although a decision has not been finalized, as Meta is planning for data centers expected to be completed in 2027, interest from other tech giants in Google's specialized AI chips could pose a threat to Nvidia. Nvidia shares have dropped 4% this morning, after a 2% rise yesterday.

Sandisk Shares Jump on S&P 500 Inclusion

Shares of Sandisk (SNDK) are climbing on Tuesday following a 13% surge on Monday upon news that the maker of SD cards and other computer storage products will be added to the S&P 500. Sandisk will replace The Interpublic Group of Companies (IPG), which is set to be acquired by Omnicom, another S&P 500 company. These changes will take effect on Friday, along with a corresponding change to the S&P SmallCap 600, where Sandisk will be replaced by PTC Therapeutics (PTCT). Inclusion in a major index like the S&P 500 often boosts stocks by introducing the company to a broader investor audience. Sandisk shares have risen 3% in recent premarket trading.

Alibaba Stock Rises as Chinese Retailer's Earnings Top Estimates

Shares of Alibaba (BABA), a Chinese e-commerce company, are rising on Tuesday after the company's latest quarterly results exceeded expectations. Revenue increased by 5% year-over-year to 247.8 billion Chinese yuan ($34.8 billion), while earnings per share reached CNY1.09, both surpassing the analyst consensus compiled by Visible Alpha. CEO Eddie Wu stated that the company has "entered into an investment phase to build long-term strategic value in AI technologies and infrastructure and a consumption platform integrating daily life services and e-commerce." In February, Alibaba announced plans to invest approximately $52 billion in its AI and cloud infrastructure over the next three years. U.S.-listed Alibaba shares have risen 3% ahead of the opening bell.

Best Regards,

Stock Market Charlie