US stock futures wavered below the flatline Friday as a tech-led rally showed real signs of fatigue for the first time in over a week.
Futures tied to the benchmark S&P 500 (^GSPC) lost around 0.1%, while those tied to the tech-heavy Nasdaq Composite (^IXIC) fell by around the same amount. Futures on the Dow Jones Industrial Average (^DJI) wobbled below the flatline.
Thursday’s dip in the S&P 500 and Nasdaq registered as notable mainly because it was an anomaly in recent weeks. The S&P has been flying higher, briefly crossing 5,500 for the first time Thursday. The Nasdaq snapped a streak of seven straight record closes with its loss Thursday.
The AI-fueled rally has been driven by Nvidia (NVDA), which briefly catapulted to the title of world’s most valuable company this week. After a sizable loss on Thursday, it was down more than 1% in premarket trading Friday. Other chip stocks, including Broadcom (AVGO), Super Micro Computer (SMCI), and Qualcomm (QCOM), slumped with Nvidia in premarket trading.
Investors are also assessing the broader health of the US economy and the path for interest rates. Former St. Louis Fed president James Bullard, an inflation hawk, said Thursday that last week’s cool Consumer Price Index reading could pave the way for a rate cut in September. Around two-thirds of traders still expect rate cuts to begin then, according to the CME FedWatch tool.
On the macroeconomic front, an initial read on US economic activity from S&P Global is due out Friday morning.
