MORGANABLE BUSINESS / MARKETS
US stock futures rose on Monday, November 2, as technology shares recovered from a sharp sell-off that had weighed on Wall Street during October.
Akure —
US stock futures rose on Monday, November 2, as technology shares recovered from a sharp sell-off that had weighed on Wall Street during October.
Contracts linked to the Nasdaq 100 gained about 0.9 per cent in early trading, while S&P 500 and Dow futures each advanced roughly 0.5 per cent. The rebound offered relief, although AI spending concerns remained.
The recovery followed a difficult end to October for major US indexes. Technology shares fell sharply on Friday after disappointing updates from large companies renewed questions about the cost of building artificial intelligence infrastructure.
The Nasdaq recorded its worst daily performance since June, while the Nasdaq 100 suffered its weakest month in more than a year. As a result, investors entered November cautiously despite Monday’s early gains.
The technology-heavy Nasdaq 100 lost more than $2.5 trillion in market value during October, according to Reuters.
The decline reflected growing concern that major technology companies may be investing too much in artificial intelligence without showing enough financial returns.
These companies have committed large sums to data centres, advanced chips and computing capacity. However, investors want clearer evidence that the spending will produce stronger revenue and profits.
The latest pressure also followed earnings updates from major technology businesses. Intel suffered a steep fall on Friday after it forecast quarterly revenue below market expectations and said it did not expect positive cash flow this year.
The chipmaker’s shares fell almost 30 per cent in that session, marking one of its sharpest daily declines in decades.
On Monday, however, the stock edged higher in early trading as investors assessed whether the previous sell-off had gone too far.
Several other technology shares helped lift sentiment before the opening bell. SpaceX and Alphabet were among the early gainers, while broader growth stocks also advanced. The rebound was not universal, however.
Apple shares edged lower ahead of its quarterly results, which were due after Monday’s market close. Investors were watching the company’s revenue, profit margins, chip costs and outlook for the holiday shopping period.
Apple’s results became a major focus because the company has taken a different path from technology groups that have made enormous investments in artificial intelligence infrastructure.
Analysts expected the company to report higher quarterly revenue and profit, while investors also wanted guidance on demand for its latest iPhone models.
Beyond company earnings, investors were monitoring oil prices and developments in the Middle East.
Crude prices fell by more than four per cent in early trading after reports of diplomatic efforts involving the United States and Iran raised hopes of easing supply concerns.
Lower oil prices can reduce pressure on businesses and consumers because energy costs affect transport, production and household spending. Therefore, the decline offered another source of support for risk appetite.
However, the situation remained uncertain. Iran’s foreign minister said negotiators were in Qatar discussing a proposal to reopen the Strait of Hormuz, while denying direct talks with Washington.
The waterway is an important route for global oil shipments. Any disruption could push energy prices higher and increase inflation risks. For that reason, traders continued to follow diplomatic developments alongside movements in share prices.
Investors were also preparing for the US midterm elections on Tuesday. The vote will determine control of Congress and could influence the direction of economic and regulatory policy.
Although investors may welcome greater clarity after the vote, the outcome could still create fresh uncertainty for companies and financial markets.
Economic data will provide another important test this week. Investors are waiting for manufacturing figures and several labour market updates, including the government’s October employment report due on Friday.
The report will offer fresh information about hiring and the health of the US economy. A weaker result could raise concerns about growth, while stronger employment may influence expectations for interest rates and the Federal Reserve’s next decisions.
Corporate earnings will also remain in focus. Palantir Technologies was among the companies scheduled to report on Monday, while chipmaker Advanced Micro Devices was due to release results on Tuesday.
These updates could provide further evidence of demand for artificial intelligence products and the financial returns from technology investment. In particular, investors will examine whether companies can turn strong demand into sustainable profits.
The wider market response will depend on how investors balance these competing signals. Lower oil prices and a recovery in technology shares may support equities in the short term.
At the same time, high spending plans, borrowing costs and uncertainty about future earnings could limit gains.
The recent sell-off has shown how quickly sentiment can change when investors question the value of a popular market theme.
Monday’s rise in futures therefore did not confirm that Wall Street had moved past its technology-led decline.
Instead, it showed that some investors were willing to return to shares after last week’s losses.
The strength of the recovery will depend partly on upcoming earnings and whether companies can explain how artificial intelligence investments will generate returns.
Clearer guidance could restore confidence, while further signs of weak cash flow may renew selling pressure.
For now, investors are entering November with several major events ahead. Apple’s results, the US elections, employment figures and developments in oil markets could all influence trading during the week.
Technology shares remain central to the outlook because of their weight in major indexes. If the sector stabilises, it could help broader indexes recover.
Nevertheless, traders are likely to remain selective until companies provide stronger evidence that heavy investment can support lasting economic growth over time.
