US stock futures edge higher; sentiment buoyed by likely rate cut, Nvidia eyed

Investing.com-- U.S. stock index futures edged slightly higher Tuesday, stabilizing after a volatile period ahead of this week’s eagerly-awaited results from chipmaking giant Nvidia (NASDAQ:NVDA).

By 05:45 ET (09:45 GMT), Dow Jones Futures rose 5 points, or 0.1%, S&P 500 Futures gained 6 points. or 0.1%, while Nasdaq 100 Futures advanced 40 points, or 0.2%.

DJIA at record high

The Dow Jones Industrial Average hit a record high on Monday as a rotation out of technology stocks favored the index’s constituents.

The blue chip index has registered gains of 9.4% so far in 2024, while the broad-based S&P 500 has advanced nearly 18% and the technology-heavy Nasdaq Composite is up just over 18%.

Sentiment buoyed by likely September cut

Overall sentiment towards stock markets remains relatively upbeat on the prospect of lower interest rates.

Dovish comments from Federal Reserve officials, especially Chair Jerome Powell, saw traders pricing in an at least 25 basis point cut in September, CME Fedwatch showed.

But the Fed’s shift in tone, which came amid signs of a severely cooling labor market, has raised some concerns over slowing economic growth.

The highlight of this week's economic calendar will be Friday's Personal Consumption Expenditures price index, the Federal Reserve’s preferred inflation yardstick.

Revised second-quarter GDP figures on Thursday, along with the weekly report on initial jobless claims, are also on the agenda.

Nvidia's earnings in focus

There are quarterly earnings due from retailer Nordstrom (NYSE:JWN) after the closing bell, and they will be studied carefully for clues of the health of consumers.

However, the week's main corporate focus will be squarely on Nvidia’s earnings on Wednesday.

The stock is at the heart of a massive AI-driven rally in valuations over the past year. But this rally has come under threat over the past two months, at least in the broader tech sector.

Earnings from other major chipmakers, namely TSMC (NYSE:TSM) and ASML (NASDAQ:ASML), released in July, have suggested that the chipmaking sector was still primed to benefit from AI demand.

Elsewhere, Apple (NASDAQ:AAPL) announced on Monday that Luca Maestri will step down as chief financial officer from the beginning of the 2025, while Skydance Media looks set to gain control of Paramount Global (NASDAQ:PARA) after media executive Edgar Bronfman Jr withdrew from the race for control of the media conglomerate.

Crude hands back some recent gains

Crude prices fell Tuesday, handing some of the recent strong gains with traders seeking more cues on production disruptions in Libya and a wider war in the Middle East.

By 05:45 ET, the U.S. crude futures (WTI) dropped 1% to $76.66 a barrel, while the Brent contract fell 0.9% to $79.67 a barrel.

Both benchmarks have gained some 7% over the past three sessions, rebounding from their lowest levels since early January, driven by expectations of U.S. interest rate cuts that could boost fuel demand, potential closures of Libyan oilfields and concerns over a wider Middle East conflict potentially disrupting supply from the key producing region.

(Ambar Warrick contributed to this article.)

This article first appeared in Investing.com