US stock futures rose on Monday as the AI trade remained in focus ahead of a busy week of earnings and inflation data.
Futures on the Dow Jones Industrial Average (YM=F) rose 0.9%, while those on the S&P 500 (ES=F) gained 0.6%. Contracts for the Nasdaq-100 (NQ=F) rose 0.5% after all three indexes posted losses last week.
All eyes will be on how the artificial intelligence trade opens on Monday following a volatile post-election shake-up in markets and the revelation that Nvidia’s (NVDA) board is opening an investigation into CEO Jensen Huang over his affair.
Several news outlets reported last week that the US believes Huang had a romantic relationship with Alice Huang, a Chinese businesswoman who is alleged to have been recruited to spy for China’s intelligence agency. In a memo to employees obtained by the FT, Huang admitted to marital infidelity, stating, “I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry.”
Nvidia stock fell 6% in premarket trading, though broader stock indexes appeared to shrug off the news as they continue to recover from a bruising sell-off last Thursday. In Asia, the Kospi index (^KS11) in South Korea and the Nikkei index (^N225) in Japan rose over 1%. Hong Kong’s Hang Seng (^HSI) rose more modestly.
The biggest swell of third quarter earnings results is in the books, with just a few more weeks in the reporting season. On Monday, Hims and Hers (HIMS), Rocket Lab (RKLB), and Monday.com (MNDY) are among the companies sharing earnings.
The week starts off with light economic data, with wholesale trade data serving as the primary report.
LIVE 3 updates
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2 big AI narratives keep wrestling with each other for control of the market
Yahoo Finance’s Ethan Wolff-Mann writes in today’s Morning Brief newsletter:
What’s more important: the chip and AI infrastructure trade or the companies that actually provide AI?
As we wrote in the Morning Brief on Friday, “A data center slowdown is bad for the stock market’s AI engine,” and “A data center slowdown is good for Big Tech’s profit machine.”
Can Google (GOOG, GOOGL), Microsoft (MSFT), and Amazon (AMZN) deliver AI at least some productivity and tools to clients with the compute they have — and make a lot of money doing so, flipping the switch from growth and scale to monetization?
Maybe! Those companies are healthily in the green since the election, doing just fine amid the broader sell-off. And while Tesla (TSLA) has sold off, SpaceX (SPCX) is mostly doing fine.
As DataTrek’s Nicholas Colas wrote on Thursday, you need to look at the entire week, not just the bloody Thursday, to see the bigger picture (small as that is). And it’s pretty clear that this may be reflected in the broad indexes, but it’s mostly about chips.
“As for what the market is ‘saying’ over the last 2 days, we believe the moves are AI-centric, not augurs of a looming recession,” Colas wrote, also noting that Google and Co. are doing fine.
Read more.
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Nvidia’s board launches investigation into CEO Jensen Huang’s affair with an alleged Chinese spy
Yahoo Finance’s Ines Ferré and Daniel Howley report:
Nvidia’s (NVDA) board is launching an independent investigation into reports that a woman CEO Jensen Huang was having an affair with was allegedly spying on him for the Chinese government.
In an email to employees Sunday, Huang admitted to having an extramarital affair.
… The revelations come after reports of ties between Huang and a woman believed to be passing information to the Chinese government.
Last month, the New York Times reported the US intelligence service believed a Chinese national named Alice Huang, a former leader at Megaspeed, an Nvidia chip customer, and someone with a well-documented relationship with Huang himself, may have acted as an intelligence asset, sharing information with the ruling party in Beijing.
Yorkville Ives partner and senior managing director Dan Ives wrote in a note to investors on Sunday that the investigation is a “black eye” for Huang and will likely spark multiple congressional investigations.
“The key question investors will be asking is: Will Jensen remain CEO of Nvidia?…. The investigation will be key, and we would expect Jensen to continue in his role as CEO with no interruption in the near-term,” Ives wrote.
Read more.
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Good morning. Here’s what’s happening today.
Economic data: New York Fed’s Consumer Inflation Expectations for October (previous 3.9%), Wholesale Inventories for September
Earnings calendar: Constellation Energy (CEG), KKR (KKR), Barrick Mining (B), Occidental Petroleum (OXY), Skydance (SKYD), Take-Two Interactive Software (TTWO), NRG Energy (NRG), Kaspi.kz (KSPI), Paramount Skydance (PSKY), Praxis Precision Medicines (PRAX), Sanmina (SANM), Clearway Energy (CWEN), Qualys (QLYS), H&R Block (HRB), Ionis Pharmaceuticals (IONS), Casella Waste Systems (CWST), The Trade Desk (TTD), Hims & Hers Health (HIMS), NexGen Energy (NXE), monday.com (MNDY), Archer Aviation (ACHR), Via Transportation (VIA), USA Rare Earth (USAR), Plug Power (PLUG), Lucid Group (LCID), Trump Media & Technology Group (DJT)
Catch up on some top stories from over the weekend:
Nvidia’s board launches investigation into CEO Jensen Huang’s affair with an alleged Chinese spy
The October jobs report just gave the Fed a new reason to hike rates
Anthropic’s IPO dilemma after the AI sell-off: ‘Damned if you do, damned if you don’t’
Wall Street hiring helps lift finance jobs in October
Tech stocks are now cheaper than the S&P 500 for the first time since 2017 — here’s what history says comes next
Trump backs Nvidia CEO after he admits affair with suspected spy
Golf carts are having a moment. So is this $15K Fiat.
