Stock futures were steady late Monday, even as Nvidia shares rose following President Trump’s approval for H200 chip sales to China. This deal allows the U.S. to take a significant cut from these sales.
For the Dow Jones futures, the numbers hovered just below zero. S&P futures saw a slight uptick of less than 0.1%, while Nasdaq 100 futures rose by over 0.1%.
In after-hours trading, Nvidia’s stock climbed by more than 2%. Trump announced via Truth Social that Nvidia could sell its H200 chips to “approved customers” in China, with 25% of the sales going to the U.S. government. Trump claimed that Chinese President Xi Jinping had a positive response to the deal. Nvidia’s CEO, Jensen Huang, recently met with Trump, which helped facilitate this agreement after lengthy discussions.
In Monday’s market, tech stocks shined. Among the 11 S&P 500 sectors, tech was the only one that ended positive, buoyed by solid gains in several semiconductor companies. Broadcom jumped nearly 3%, and both Nvidia and Microsoft saw gains of around 2%. Reports indicated that Microsoft is exploring the idea of designing custom chips with Broadcom.
Despite this, all major U.S. stock indexes dipped in the prior trading session, and the 10-year Treasury yield remained on the rise, signaling ongoing concerns about inflation.
Traders are now anticipating the Federal Reserve’s key interest rate decision expected on Wednesday. Most analysts predict a quarter-point cut, similar to previous reductions in September and October. Current futures indicate an 89% likelihood of a rate drop, up from 67% just a month earlier, according to the CME’s FedWatch tool.
Bret Kenwell, an investment analyst at eToro, highlighted the importance of how Fed Chairman Powell presents the decision and any economic forecasts. “This will impact the market’s reaction not just this week, but for the following month too,” Kenwell said. He emphasized that with stocks and crypto experiencing a downturn, investors are hoping for the Fed to support a year-end market rally.
Recent data showing softer-than-expected inflation helped boost stocks last week, with all major U.S. averages increasing for the second consecutive week. Kenwell also noted that the Fed is navigating multiple factors ahead of its meeting, such as persistent inflation and a shifting economic environment.
On a related note, this week will also see earnings reports from major players in artificial intelligence like Oracle and Broadcom, plus updates from retailers Costco and Lululemon. This data could provide further insights into the tech sector’s trajectory and consumer behavior in the coming months.
For a deeper understanding, you can check out the CME Group’s FedWatch Tool for real-time updates on interest rates and market predictions.
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