The S&P 500 and the Nasdaq were set for a slightly higher open on Tuesday, as AI-linked shares recouped some of the previous session’s sharp losses and a mixed bag of corporate earnings fueled volatility.
Monday’s selloff followed Chinese startup DeepSeek’s launch of artificial intelligence models it said were on a par or better than industry-leading rivals in the United States at a fraction of the cost.
AI chip leader Nvidia rose 3.4% in premarket trading, a day after $593 billion was wiped off its market value in the biggest single-session loss for any company.
Other AI-linked stocks also regained some ground, with Oracle and Broadcom rising 2.5% and 3.2%, respectively.
Power companies, which are expected to see a surge in demand from energy-intensive data centers needed to develop AI technology, were broadly higher after tumbling a day earlier. Vistra and GE Vernova added 4.9% and 6.4%.
“We’ve been skeptical of the valuations and the recent moves in some of these names that are levered to the (AI) story,” said Keith Buchanan, senior portfolio manager at GLOBALT Investments.
“The valuation gap between those names and the market had made those names vulnerable to a pullback.”
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The tech-heavy Nasdaq dropped more than 3% on Monday, its worst single-day showing in more than a month, while the benchmark S&P 500 fell close to 1.5%.
At 08:33 a.m. ET, Dow E-minis were down 36 points, or 0.08%, S&P 500 E-minis were up 12.25 points, or 0.2%, and Nasdaq 100 E-minis were up 58 points, or 0.27%
Boeing shares, last down 0.3%, were volatile after the planemaker reported its biggest annual loss since 2020.
Royal Caribbean gained 4.6% as the cruise operator forecast annual profit largely above expectations, while Lockheed Martin dropped 3.3% after the defense giant forecast 2025 profit below estimates.
Credit card-focused consumer banking firm Synchrony Financial dipped 4.7% after forecasting lower net revenue for 2025, while aerospace and defense major RTX gained 4.8% after posting a rise in quarterly profit.
Earnings from “Magnificent 7” members Microsoft, Facebook-parent Meta, Apple and Tesla are due later this week.
Also in focus, the Federal Reserve is widely expected to hold its lending rate steady in its first interest-rate decision of the year on Wednesday, while the December reading of personal consumption expenditures (PCE) is scheduled for Friday.
A January consumer confidence reading is due at 10 a.m. ET later in the day.
U.S. President Donald Trump said late on Monday he plans to impose tariffs on imported computer chips, pharmaceuticals and steel.
A media report said newly elected Treasury secretary Scott Bessent has been pushing for new universal tariffs on U.S. imports to start at 2.5% and rise gradually by the same amount each month.
Markets have been on edge about Trump’s proposed tariffs due to concerns they could worsen inflationary pressures and slow Fed rate cuts.
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