US Stock Futures Find Footing After Week of AI-Driven Volatility
US stock futures showed stability Sunday night, september 28th, following a week of declines on Wall Street largely attributed to waning enthusiasm surrounding artificial intelligence (AI) stocks.
Futures tied to the Dow Jones Industrial Average rose 17 points. Meanwhile, futures for both the S&P 500 and the Nasdaq Composite settled near their previous closing levels.
The week saw a pullback in stock performance, sparked by investor skepticism regarding the sustainability of the recent AI-fueled market rally. Concerns were raised following Nvidia’s partnership proclamation, leading to a $100 billion valuation question.
Despite the weekly losses, Friday, September 26th, saw a rebound in US stocks at the close of trading, buoyed by the release of key inflation data. The dow Jones Industrial Average gained 299 points,a 0.6% increase, closing at 36,247.29. The S&P 500 rose 0.5% to 4,663.70, and the Nasdaq Composite increased 0.4% to 13,704.068.
The Personal Consumption Expenditure (PCE) Index for August, the Federal Reserve’s preferred inflation measure, indicated a 2.9% annual increase in core inflation (excluding food and energy). This figure aligned with economists’ expectations,as surveyed by Dow Jones. The overall PCE index showed a 2.7% annual increase, with a 0.3% monthly rise, also in line with forecasts.
Market analysis currently suggests a continued expectation of two quarter-percentage-point interest rate cuts at upcoming Federal Reserve meetings, according to the CME FedWatch tool.
Investors are also monitoring labor market data, with concerns that persistently low unemployment claims could diminish the Federal Reserve’s incentive to lower interest rates.
“After a three-day decline in the broader market, this is sufficient to attract buyers,” noted David Russell, global Head of Market Strategy at Tradestation. He added that the unemployment claims and GDP revision,coupled with the inflation data,helped to alleviate some concerns.
looking ahead, the September non-farm payroll report, scheduled for release Friday morning, will be a key focus for Wall Street.Analysts suggest the market needs a “moderate” jobs number – not too strong to provoke a hawkish response from policymakers, and not too weak to signal a meaningful economic slowdown.
Despite the recent volatility, September has been a positive month for the market overall. the S&P 500 is up 2.8% month-to-date, the Dow Jones has gained 1.5%, and the Nasdaq, heavily weighted towards technology stocks, has led gains with a 2.9% increase.
