(Reuters) -Wall Street futures fell on Tuesday with concerns around elevated technology valuations resurfacing, while markets closely watched progress toward the end of the longest government shutdown in U.S. history.
Technology and AI shares rebounded on Monday from last week’s steep losses. The Nasdaq posted its largest daily gain since May 27 and the S&P 500 recorded its biggest one-day percentage rise since mid October.
Markets had rallied on the back of expectations that the government would reopen as soon as this week, as the prolonged closure weighs on the economy and contributes to a data blackout for the Federal Reserve and traders alike.
“Following the government reopening, we assume that delayed economic data will be released over the coming few weeks, lifting some of the fog that has lingered since early October,” said Tom Nelson, Franklin Templeton Investment Solutions’ head of market strategy.
“Assuming the government ultimately reopens soon, strong seasonals and resilient growth may move back to front-of-mind considerations.”
At 5:24 a.m. ET, Dow E-minis were down 13 points, or 0.03%, S&P 500 E-minis were down 13.25 points, or 0.19%, and Nasdaq 100 E-minis were down 90.5 points, or 0.35%.
Still, worries around AI-related companies that have been the main drivers of the bull market this year persisted as traders evaluated returns from technology and circular expenditure within the sector.
Nvidia shares dropped 1.4% after Japanese technology investor SoftBank Group disclosed that it had offloaded the rest of its shares in the AI bellwether for $5.83 billion.
Nvidia-backed CoreWeave’s shares dropped 8.7% in premarket trading after the cloud computing firm trimmed its annual revenue forecast. The company’s stock has more than doubled since going public earlier this year.
As the third quarter earnings season approaches its conclusion, profit growth at S&P 500 companies is expected to increase 16.8% year-on-year compared to initial estimates of 8%, according to LSEG data.
FEDERAL RE-OPENING AWAITED
The U.S. Senate on Monday approved a compromise that would end the shutdown that has disrupted food benefits for millions, left federal workers unpaid and snarled air traffic.
The bill will head next to the House of Representatives for approval before being sent to U.S. President Donald Trump for his signature, with betting markets like Polymarket fully pricing in a reopening this week.
White House economic adviser Kevin Hassett said in an interview that a continued shutdown could lead to a negative fourth-quarter U.S. GDP print.
Meanwhile, Trump said the U.S. faced an economic and national security disaster if the Supreme Court ruled against his use of an emergency powers law to impose sweeping tariffs.
In a hearing last week, Supreme Court justices had expressed doubt on the president’s authority to implement tariffs under the law.
Among other moves, Rocket Lab shares jumped 9.8% after the space company posted record third-quarter revenue.
Quantum computing firm Rigetti Computing reported third-quarter revenue below estimates, sending its shares falling 3.6%.
AST Spacemobile shares were down 2.3% as the satellite communications firm missed third-quarter revenue expectations.
(Reporting by Twesha Dikshit in Bengaluru; Editing by Maju Samuel)
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