U.S stock futures dip after Wall Street rally on Powell’s dovish comments; Nvidia results pending
U.S. stock index futures edged lower in pre-market trading Monday, following sharp gains on Wall Street after dovish remarks from Federal Reserve Chair Jerome Powell signaled the prospect of near-term interest rate cuts.
Investor attention this week is firmly on earnings from artificial intelligence leader NVIDIA Corporation (NVDA), seen as a key indicator for the rapidly expanding sector.
On Friday, U.S. stocks surged, erasing much of their recent losses as markets priced in a stronger likelihood of a September rate cut by the Fed.
By 06:17 ET (10:17 GMT), S&P 500 Futures slipped 0.24% to 6,451.25 points, Nasdaq 100 Futures declined 0.32% to 23,424 points, and Dow Jones Futures were down 0.22% at 45,532.0 points.
Powell signals potential rate cut, Wall Street rallies
Speaking at the Jackson Hole Symposium on Friday, Powell said the Fed may cut rates in September amid mounting risks to the labor market.
However, he cautioned that the decision was not finalized, given persistent inflation concerns and uncertainty surrounding the impact of President Donald Trump’s trade tariffs.
Still, Powell’s tone was notably more dovish than recent Fed communications, prompting markets to ramp up bets on a September cut. U.S. indexes rallied in response, recovering most of last week’s declines.
On Friday, the S&P 500 gained 1.5% to close at 6,466.91 points, the NASDAQ Composite climbed 1.9% to 21,496, and the Dow Jones Industrial Average jumped 1.9% to a record 45,631.74 points. The U.S. Small Cap 2000 outperformed, surging 3.9% after Powell’s speech.
“Small Caps run the risk of seeing only a short-lived outperformance trade once again, particularly if the economic concerns that appeared open the door for a September cut ultimately come to fruition,” RBC strategist Lori Calvasina noted.
Markets now assign roughly an 89% probability to a 25bp rate cut in September, with a 49% chance of another 25bp cut in December.
Nvidia awaited for more cues on AI
All eyes this week are on NVIDIA Corporation’s (NVDA) second-quarter earnings, scheduled for release Wednesday.
Widely viewed as a bellwether for AI demand, the company is expected to deliver another robust quarter.
Investors, however, will be closely watching its China business, which likely weakened amid recent U.S. export restrictions and heightened Chinese scrutiny of AI chips. Nvidia reportedly halted production of its China-specific H20 chip last week.
The results also come after a sustained selloff in technology stocks, as investors questioned the sustainability of AI-driven profitability.
Beyond Nvidia, corporate earnings this week will also include Dell Technologies Inc (DELL), Dick’s Sporting Goods Inc (DKS), Best Buy Co Inc (BBY), Dollar General Corporation (DG), and Abercrombie & Fitch Company (ANF).
Additionally, second-quarter gross domestic product data is due later this week, following preliminary July figures that pointed to resilient growth.
