Nasdaq futures edge lower as Nvidia turmoil pressures AI trade sentiment
U.S. stock index futures are mixed early on Friday as investors weigh a volatile week for technology shares and renewed pressure on the AI trade. Nvidia's leadership upheaval is adding to concerns about spillover risks across the sector, while markets also await October producer price data for clues on the Federal Reserve's next rate move.
Highlights
- Nasdaq 100 futures fall 0.11% while S&P 500 E-minis gain 0.13% as Nvidia volatility pressures broader AI sentiment.
- Nvidia shares rebound 1.8% premarket after falling 11% this week amid CEO Jensen Huang's resignation and allegations affecting industry scrutiny.
- Odds of a 50 basis point Fed rate hike stand at 12%, with inflation data later Friday set to influence interest rate expectations and equity recovery prospects.
Market moves and source developments
As reported by Reuters, Nasdaq 100 futures slip 0.11% at 5:03 a.m. ET, while Dow E-minis rise 98 points, or 0.19%, and S&P 500 E-minis add 9.75 points, or 0.13%. The move comes after a turbulent week in which Nvidia remains at the center of market attention.Nvidia shares rise 1.8% in premarket trading after falling about 11% this week through Thursday. The company is still on track for its longest streak of weekly losses since October 2012 after CEO Jensen Huang quits following reports of alleged extramarital affairs, including one involving a suspected Chinese spy.
The controversy is raising broader questions for the AI sector because Nvidia sits at the center of the industry boom. Investors say the company's financing arrangements with several other AI companies could face closer scrutiny following the leadership change.
Rate outlook and broader market impact
Sentiment is also shaped by inflation data due later on Friday, with investors focused on October's producer price reading for guidance on how much the Federal Reserve raises rates next month. Traders are fully pricing in a hike, while some policymakers in recent days have opened the door to a 50 basis point increase instead of the more widely expected 25 basis point move.Odds of a 50 basis point hike stand at about 12%, according to the CME FedWatch tool. The weaker mood around AI stocks threatens the recent recovery in equities after last week's selloff that followed Democrats' victory in the midterms.
Sean Peche, founder and portfolio manager at Ranmore Fund Management, says he remains bearish on AI-related stocks and warns investors need to exit such waves before they break. His comments reflect a more cautious tone toward one of the market's most crowded themes.
Earlier, we outlined the Nasdaq 100 slide that broke key moving averages as Treasury yields fell after US inflation data.
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