Tech led US stock futures lower on Tuesday, pointing to another downbeat session on Wall Street after AI jitters helped drive back-to-back weekly losses for the broader market.
S&P 500 futures (ES=F) moved down roughly 0.3%, while those on the Nasdaq 100 (NQ=F) slid 0.6% Contracts on the Dow Jones Industrial Average (YM=F), which includes fewer tech names, fell 0.1%.
Investors are heading into shortened week of trading after US markets were closed Monday in observance of Presidents Day.
On Friday, the tech-heavy Nasdaq Composite (^IXIC) booked a fifth straight weekly drop for its longest losing streak since 2022. The Dow (^DJI) and S&P 500 (^GSPC) have now fallen in four of the past five weeks.
Losses have been driven by worries about artificial intelligence and its ability to disrupt different industries, with everything from wealth management to transportation to logistics coming under scrutiny.
Concerns about economic growth and broader sector disruption overshadowed a cooler-than-expected January inflation report released Friday. Consumer price index data came in below estimates, providing some relief on price pressures.
Investors will look for further insight into inflation this week with the release of the Personal Consumption Expenditures index, scheduled for release Friday. Minutes from the Fed’s latest policy meeting are due Wednesday while questions circulate around a purported “loyalty pledge” signed by Kevin Warsh, Trump’s pick for the next Fed chair.
In corporate news, Walmart (WMT), DoorDash (DASH), and Malson Coors (TAP) are all slated to post earnings results throughout the week.
LIVE 7 updates
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Hapag-Lloyd buys ZIM in $4.2 billion deal, sending shipping rival’s shares soaring
Germany’s Hapag-Lloyd (HLAG.DE, HPGLY) is buying ZIM Integrated Shipping Services in a deal worth $4.2 billion, bringing together two of the world’s biggest shipping lines.
Shares of Israel-based ZIM rocketed over 35% higher in premarket trading, after the two companies confirmed the takeover on Monday.
The Wall Street Journal reports:
Read more here.
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Quick Take: BofA fund manager survey
Nothing like a BofA fund manager survey drop the day after a market holiday.
Lots of great nuggets in the one out this morning, but the chart below stood out to me. So many on the Street I talk with expect a very robust economy this spring, in part because of expectations for a strong tax refund season.
Goes a long way in explaining the hot small-caps trade.
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Masimo stock rockets higher as Danaher reportedly nears $10 billion deal
Masimo (MASI) stock surged over 30% in premarket following a report that Danaher (DHR) is closing in on a deal to buy the medical technology company.
The deal moves come two years after activist investor Politan succeeded in pushing through a change in Masimo’s board.
It would be the biggest acquisition by Danaher in over half a decade, the Financial Times reported. Shares of the US life sciences manufacturer fell over 5% before the bell.
The FT reports:
Read more here (premium subscribers)
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Activist Elliott builds stake in Norwegian Cruise Line
Norwegian Cruise Line (NCLH) stock rose 6% before the bell on Tuesday following the news that activist investor Elliott has built a 10% stake in Norwegian Cruise Line and plans to push for changes, according to The Wall Street Journal.
Elliott has become one of the cruise line’s top investors and is keen to fix the company’s underperformance. Elliott has so far built a stake in Southwest Airlines (LUV), as well as oil refiner Phillips 66 (PSX) and Toyota Industries (TYIDY). According to The Wall Street Journal, Elliott has over $79 billon in assets under management and is concerned with the financial performance of Norwegian Cruise Line.
The Wall Street Journal:
Read more here.
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Reminder on Nvidia
Nvidia (NVDA) has a very high bar to clear to appease investors when it reports earnings on February 25.
Citi this morning points to a few important things to keep in mind ahead of time:
“Key Investor Topics — a) Higher component costs impact to expected mid 70s percentage gross margins; b) updates on Anthropic/OpenAI investments; c) inference competition, and d) impact of the Groq licensing agreement on Nvidia’s product roadmap.”
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Dollar gains as traders question pricing for three Fed rate cuts
From Bloomberg:
The dollar (DX-Y.NYB) is edging higher for a second day, shrugging off market pricing that implies roughly three Federal Reserve interest-rate cuts this year.
The Bloomberg Dollar Spot Index rose 0.1% even as the yen strengthened about 0.4%, with declines for other currencies in the basket keeping the gauge higher.
Options markets indicate near-term bearishness on the greenback has eased, with so-called front-end risk reversals at their least negative in almost a month.
Money markets are still pricing about 64 basis points of Fed cuts by year-end. Some strategists argue that is overdone as three cuts may be more than the data justify, leaving the market vulnerable to a dollar rebound.
“Fed funds rate-cut bets look stretched, leaving room for a near-term USD-positive repricing,” said Elias Haddad, global head of markets strategy at Brown Brothers Harriman, citing resilient growth and underlying inflation that has stalled above the Fed’s 2% target.
Read more here.
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Gold holds around $5,000 mark after pullback from record
Bloomberg reports:
Read more here.
