Futures linked to the major U.S. indices gain ahead of trading day which could shed more light into the U.S. interest rate path and the health of Corporate America. Minutes from the Federal Reserve’s January meeting are set to be released, while cybersecurity group Palo Alto Networks shares sink on an underwhelming profit guidance. Elsewhere, Warren Buffett’s last quarter in charge of Berkshire Hathaway saw the investment conglomerate slash its positions in a major tech firm and large U.S. bank.
Get key market insights with InvestingPro 1. Futures higher
U.S. stock futures pointed higher on Wednesday, as investors geared up for the release of minutes from the Federal Reserve’s latest monetary policy meeting and gauged a batch of fresh corporate earnings.
By 02:43 ET (07:43 GMT), the Dow futures contract had risen by 55 points, or 0.1%, S&P 500 futures had climbed by 12 points, or 0.2%, and Nasdaq 100 futures had slipped by 35 points, or 0.1%.
The main averages on Wall Street rose in the prior session, buoyed by a muted rebound in under-pressure technology shares. Gains in firms like Nvidia and Apple helped to mitigate a slip in Microsoft and Oracle, and push up the S&P 500 information technology sector by 0.5%.
Still, worries remained around the outlook for a tech industry that has been jolted by the unveiling of a series of cutting-edge artificial intelligence tools. Some traders have begun to fear the AI models could disrupt a swath of businesses ranging from software and financial services to real estate and logistics.
At the same time, doubts have swirled around when massive investments in AI data centers will eventually start to reap significant financial returns, threatening to cloud the outlook for mega-cap tech names which have outlined huge spending plans on the sites housing the chips underpinning AI systems.
"Tech investors remain traumatized by the volatility of the last several weeks and the shifting AI conversation, although there is growing anticipation for Nvidia’s earnings report next week (which most people expect will be strong) while software is still firmly in the penalty box despite the extremely oversold price action," analysts at Vital Knowledge said in a note.
2. FOMC minutes ahead
Minutes from the Fed’s January meeting, due out on Wednesday, could provide more insight into the path ahead for the central bank’s monetary policy.
Notably, two Fed governors, Stephen Miran and Christopher Waller, dissented from the Fed’s decision last month to hold rates steady and push pause on a series of borrowing cost cuts dating back to the middle of last year.
Policymakers highlighted signs of a stabilizing jobs picture and steady -- albeit above-target -- inflation as reasons for standing pat with rates at 3.5% to 3.75%.
Officials are also broadly tipped to stick to this range until June at the earliest, adopting a wait-and-see attitude as they attempt to eye the evolution of employment and price gains in the months ahead.
Fed Chair Jerome Powell, meanwhile, is approaching the end of his tenure at the helm of the central bank. Trump has nominated former Fed Governor Kevin Warsh to replace Powell, and investors have been attempting to suss out how Warsh’s approach to rates could differ from his predecessor.
