Wall St futures rise after waning rate cut bets, tech rout drive deep losses
Investing.com-- Wall Street futures rose on Thursday evening after waning bets on a December interest rate cut and a sustained rotation out of technology stocks drove steep losses during the main session.
Markets largely looked past optimism over the U.S. government reemerging from its longest ever shutdown, even as the move heralds a resumption in official economic data releases.
S&P 500 Futures rose 0.2% to 6,773.0 points, while Nasdaq 100 Futures rose 0.2% to 25,137.50 points by 19:35 ET (00:35 GMT). Dow Jones Futures rose 0.2% to 47,640.0 points.
A report that the Donald Trump administration was considering some tariff exemptions, to bring down food prices, offered some relief.
Wall Street indexes logged steep losses on Thursday as investors sharply dialed back their expectations for a December interest rate cut by the Federal Reserve.
Markets are now pricing in a 45.8% chance for a 25 basis point cut in December, much lower than the 67.8% chance seen last week, CME Fedwatch showed. The tool also showed markets pricing in a 54.2% chance the Fed leaves rates unchanged next month.
The shift in rate cut expectations was driven chiefly by heightened uncertainty over the economy, with investors now seeking more cues on the impact of the nearly 43-day government shutdown. President Trump said on Wednesday the shutdown cost the government $1.5 trillion.
Traders dialed down their bets on a December cut after several White House officials warned that employment and inflation data for October may never be released due to the shutdown. This leaves the Fed flying blind going into its December meeting, with the central bank expected to hold rates on caution over the economy.
The S&P 500 fell 1.7% to 6,737.54 points, while the NASDAQ Composite slid 2.3% to 22,980.36 points on Thursday. The Dow Jones Industrial Average fell 1.7% to 47,456.98 points.
Technology stocks were the biggest weight on Wall Street, with artificial intelligence major NVIDIA Corporation (NASDAQ:NVDA) sliding 3.6% on concerns over a AI-fueled bubble in the sector.
CoreWeave Inc (NASDAQ:CRWV) slumped 8.3% after The Verge characterized the data center firm as being “at the heart of the AI bubble,” raising questions over its business model and dependence on Nvidia.
Coreweave had sparked an AI-linked selloff earlier this week after the company slashed its annual revenue forecast due to delays in a key data center contract. The stock lost nearly a quarter of its value in the past five days.
Other major tech decliners included Tesla Inc (NASDAQ:TSLA), with a 6.7% loss, Broadcom Inc (NASDAQ:AVGO) with a 4.3% loss, and Palantir Technologies Inc (NASDAQ:PLTR) with a 6.5% slide. Palantir also faced renewed pressure after investor Michael Burry said he bought options to sell the stock at $50– less than a third of its current value– in early-2027.
Tech shares clocked steep losses through October and early-November, amid growing questions over an AI-fueled valuation bubble in the sector. Concerns over spending commitments by AI major OpenAI and circular investing by Nvidia were major drivers of this trend, as were a host of quarterly earnings prints showing shrinking margins due to AI-related spending.
