Futures Pointing To Initial Pullback On Wall Street

The major U.S. index futures are currently pointing to a lower open on Tuesday, with stocks likely to move back to the downside following yesterday’s rebound, extending recent volatility.

Technology stocks may come under renewed selling pressure after helping lead the markets higher during Monday’s session.

Concerns about AI-related debt may weigh on the sector once again, with a report from Goldman Sachs saying it is projecting $420 billion of global hyperscaler debt issuance in 2027, representing a more than 60 percent increase from its 2026 estimate.

The downward momentum on Wall Street also comes amid an extended surge by the price of crude oil, with U.S. crude oil futures jumping by more than 1 percent.

The price of crude oil had skyrocketed as much as 6.6 percent earlier in the day due to Houthi attacks on Saudi Arabian infrastructure and reports of vessel attacks in the Gulf.

However, trading activity may be somewhat subdued ahead of the release of earnings from key tech companies like SpaceX (SPCA), Tesla (TSLA) and Meta (META).

“The mounting concern about the artificial intelligence trade raises the stakes ahead of earnings updates from some of the key participants including SpaceX tonight and Tesla and Meta later this week,” said AJ Bell investment director Russ Mould.

Following the sell-off seen during last Friday’s session, stocks moved back to the upside during trading on Monday. Technology stocks helped lead the way higher, resulting in a notable rebound by the tech-heavy Nasdaq.

The Nasdaq ended the day well off its highs of the session but still jumped 290.85 points or 1.1 percent to 26,430.89. The S&P 500 also climbed 31.29 points or 0.4 percent to 7,690.73, while the narrower Dow bucked the uptrend and edged down 36.38 points or 0.1 percent to 51,966.03.

The strength on Wall Street came amid a rebound by technology stocks, which moved back to the upside after seeing substantial weakness in the previous session.

Bargain hunting may have contributed to the strength in the sector after the Nasdaq slumped to its lowest closing level in a month.

Computer hardware stocks turned in some of the tech sector’s best performances, with the NYSE Arca Computer Hardware Index surging by 2 percent after plunging to a two-month closing low last Friday.

Significant strength was also visible among semiconductor stocks, as reflected by the 1.6 percent jump by the Philadelphia Semiconductor Index.

Outside of the tech sector, retail stocks showed a strong move to the upside, driving the Dow Jones U.S. Retail Index up by 2.2 percent to its highest closing level in well over a month.

Meanwhile, telecom stocks saw considerable weakness on the day, with the NYSE Arca North American Telecom Index slumping by 2 percent.

Utilities, brokerage and airline stocks also showed notable moves to the downside, limiting the upside for the broader markets.

On the U.S. economic front, a report released by the National Association of Home Builders showed a bigger-than-expected deterioration in U.S. homebuilder sentiment in the month of October.

The report said the NAHB/Wells Fargo housing market index fell to 29 in October from 32 in September. Economists had expected the index to edge down to 31.

With the bigger-than-expected decrease, the housing market index dropped to its lowest level since hitting a matching figure in June 2012.

Commodity, Currency Markets

Crude oil futures are jumping $1.31 to $104.97 a barrel after surging $2.25 to $103.66 a barrel on Monday. Meanwhile, after falling $21 to $4,160.10 ounce in the previous session, gold futures are sliding $21.30 to $4,138.80 an ounce.

On the currency front, the U.S. dollar is trading at 157.95 yen compared to the 158.48 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1225 compared to yesterday’s $1.1210.

Asia

Asian stocks retreated on Tuesday amid renewed concerns over AI-related investments and escalating protests in France.

Investors braced for earnings results from the world’s biggest technology companies, including SpaceX, Tesla and Meta as debt levels rise in Europe and elsewhere.

S&P Global has warned that hyperscalers could be carrying more AI-related debt than currently visible through financing structures linked to data centers and smaller AI firms.

The U.S. dollar index weakened below 102.00 as investors assess the probabilities of changes to the Fed rate.

Gold was subdued at $4,123 an ounce in Asian trading, while Brent crude prices rose nearly 1 percent above $110 a barrel amid escalating conflicts in the Middle East and Eastern Europe.

China’s Shanghai Composite Index edged up 0.1 percent to 3,735.37 after the People’s Bank of China left its benchmark lending rates unchanged for the 17th straight month, in line with market expectations.

Hong Kong’s Hang Seng slumped 1.3 percent to 23,867.74 after strong Chinese GDP data dampened expectations for additional stimulus.

Japanese markets fell sharply due to concerns over rising bond yields and persistent inflationary pressures.

The Nikkei 225 Index tumbled 1.3 percent to 64,075.42, with tech stocks coming under selling pressure on concerns over credit risks and profitability surrounding AI investments.

The broader Topix Index settled 1.4 percent lower at 4,009.21. SoftBank Group, Fujikura and Furukawa Electric led losses to close about 6 percent lower.

Seoul stocks plummeted due to a chip-led AI sell-off after bond prices fell at cloud provider CoreWeave. The Kospi Index plunged 3.7 percent to 5,552.74 after rising for two consecutive sessions.

Samsung Electronics, SK Hynix and SK Square lost 3-5 percent on concerns over investments in the AI value chain.

Australian markets ended modestly lower to snap a two-session rise. The benchmark S&P/ASX 200 Index closed 0.3 percent lower at 8,816.90 after trimming early losses. The broader All Ordinaries Index ended down 0.4 percent at 8,944.20.

Mining giant BHP declined 1.6 percent after reporting a steep fall in copper production in the first quarter. Healthcare stocks advanced, with Cochlear surging 5.2 percent.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index slipped 0.2 percent to 13,631.69, extending losses for a third straight session.

Europe

European stocks have moved lower on Tuesday, extending losses from the previous session as a recovery in artificial intelligence shares faltered and Brent crude prices topped $110 a barrel due to Houthi attacks on Saudi Arabian infrastructure and reports of vessel attacks in the Gulf.

Widespread protests and unrest in countries like France and Italy, driven by rising fuel costs, reduced public services and housing issues, also prompted investors to adopt a more cautious stance.

The French CAC 40 Index is down by 1 percent, the German DAX Index is down by 0.9 percent and the U.K.’s FTSE 100 Index is down by 0.7 percent.

Nokia has moved sharply lower. The Finnish telecom and network technology company announced an agreement with SoftBank Corp. to conduct a commercial AI-RAN field trial in Japan in 2027.

Swedish-Swiss technology company ABB also shown a significant move to the downside after its third quarter earnings dropped from last year.

British distribution and services group Bunzl has also tumbled despite posting an increase in third quarter revenue and maintaining its annual forecast.

Miner BHP has also plunged after reporting a steep decline in copper production in the first quarter of fiscal 2027.

Barco has also plummeted. The Belgium-based visualization technology group reported weak third quarter results and said it expects fiscal 2026 sales to come in slightly below last year.

Meanwhile, cloud operator OVH Groupe has soared after its annual results showed both improved profitability and accelerating growth.

Swedish telecom firm Tele2 AB has also moved to the upside after its third quarter revenue came in slightly above expectations.

French advertising and public relations company Publicis Groupe has edged up slightly after saying it had reached a deal with the Federal Trade Commission to address the concerns over its proposed acquisition of LiveRamp Holdings Inc.

U.S. Economic News

A report released by the Commerce Department on Monday unexpectedly showed an extended nosedive in new residential construction in the U.S. in the month of September.

The Commerce Department said housing starts plunged by 5.2 percent to an annual rate of 1.221 million in September after plummeting by 5.9 percent to a revised rate of 1.288 million in August.

The continued slump came as surprise to economists, who had expected housing starts to jump by 2.4 percent to an annual rate of 1.305 million from the 1.275 million originally reported for the previous month.

The report also said building permits dipped by 0.2 percent to an annual rate of 1.400 million in September after tumbling by 2.1 percent to a revised rate of 1.403 million in August.

Building permits, an indicator of future housing demand, were expected to fall by 0.5 percent to an annual rate of 1.387 million from the 1.394 million originally reported for the previous month.

At 10 am ET, the National Association of Realtors is scheduled to release its report on pending home sales in the month of September at 10 am ET. Pending home sales are expected to decrease by 0.4 percent in September after rising by 0.3 percent in August.