U.S. Stock Futures Decline Amid AI Concerns and Inflation Watch
U.S. stock futures edged lower on Thursday. Investor concerns about artificial intelligence (AI) sector growth weighed on sentiment. The Nasdaq was set for a steep monthly decline.
Wall Street’s main indexes were tracking a downbeat session. This followed a strong performance last year. Nvidia, a key AI chipmaker, contributed to earlier gains. However, enthusiasm has recently cooled.
AI Sector Sees Profit-Taking
Investors pulled back from some AI-related stocks. This move suggests profit-taking after significant rises. Salesforce notably saw its shares drop. This happened after its quarterly revenue forecast disappointed analysts. The software giant’s outlook missed expectations. Its stock fell nearly 7.3% in premarket trading.
Nvidia, a leading AI chip designer, also felt pressure. Its shares fell by 1.7%. The broader Philadelphia SE Semiconductor index, which tracks chip companies, declined by 0.5%.
Another AI-focused firm, C3.ai, experienced a sharp drop. Its stock plunged by 17.0%. The company lowered its revenue forecast for the fiscal year. This news added to the sector’s concerns.
Snowflake, a cloud data analytics company, saw its shares tumble. It fell 18.2% after a weak revenue forecast. The firm also announced its CEO will retire. These developments highlight broader market anxieties.
Market Performance and Economic Data Ahead
By 06:40 a.m. ET, Dow e-minis were down 113 points, or 0.29%. S&P 500 e-minis fell 21.75 points, or 0.43%. Nasdaq 100 e-minis dropped 112 points, or 0.62%. These figures show widespread market weakness.
The Nasdaq Composite index is currently set for its largest monthly fall since December 2022. It is down over 3% so far in February. This contrasts sharply with its previous strong performance. Meanwhile, the S&P 500 and Dow are still up for the month.
Investors are now looking ahead to critical economic data. The Commerce Department will release the personal consumption expenditures (PCE) price index. This data is due on Friday. It is the Federal Reserve’s preferred measure of inflation. Economists predict a 0.4% rise in January’s core PCE. This would follow a 0.2% increase in December.
Higher inflation could influence the Federal Reserve’s policy decisions. Market expectations for interest rate cuts have shifted. The first rate cut is now largely anticipated in June. Some analysts even suggest July is possible. This marks a change from earlier predictions of March or May.
Other Companies in Focus
Several other companies saw significant movement. Booking Holdings shares rose 8.5%. The travel agency beat Wall Street expectations for quarterly profit. This positive news offered a contrast to the tech sector’s struggles.
On the other hand, Hormel Foods stock dropped 6.1%. The food producer missed its first-quarter profit estimates. It also lowered its annual profit forecast. This signals challenges in the consumer goods sector.
These varied results show a complex market environment. Investors are balancing strong corporate earnings with inflation fears. The performance of AI stocks remains a key driver for overall market direction.
