Dow futures were down about 95 points, or 0.2%, on Friday, continuing the rough week for US markets, especially tech.
The Dow’s been holding up a bit better than the Nasdaq, which slid nearly 2% as investors started worrying that AI-related stocks might be getting a little too pricey.
It’s been a tough stretch overall, with all the major indexes ending the week in the red.
The traders are watching for signs that the US government shutdown could be wrapping up soon, and there’s growing talk that the Fed might cut rates in December.
Both could help give stocks a much-needed boost.
5 things to know before Wall Street opens
1. The US government shutdown hit day 37 on Friday, and there’s still no clear end in sight. Lawmakers are stuck in a standoff over funding bills, with both sides refusing to budge.
Senate Majority Leader John Thune has already said the House’s current stopgap bill won’t pass in its current form, suggesting we might see some tweaks or even a new proposal altogether.
Meanwhile, Democrats are zeroing in on healthcare and protections for federal workers, while Republicans are focused on simply getting the government reopened first.
There are also some bipartisan talks happening around extending health insurance subsidies, but those haven’t led to an agreement yet.
In the meantime, thousands of federal workers are still furloughed or working without pay, and essential programs like SNAP are starting to feel the strain.
2. Investors are starting to get a little nervous as worries about an AI valuation bubble sweep through the tech world.
Big-name AI stocks, from chipmakers to software giants, have taken noticeable hits lately, with many traders questioning whether these sky-high prices really line up with what the companies are actually earning.
Some market watchers are even drawing comparisons to the dot-com bubble, though they’re quick to point out that things aren’t exactly the same this time around. Today’s AI firms generally have stronger balance sheets and real products in the market.
Still, there’s plenty of skepticism about whether all these companies can actually live up to their bold promises.
3. Tesla grabbed headlines after shareholders approved Elon Musk’s massive $1 trillion pay package.
The stock initially popped about 3% in after-hours trading, but that excitement didn’t last long. By the close, shares had slipped slightly to around $446, as investors started to digest just how ambitious the deal really is.
To actually earn the payout, Musk would have to pull off some staggering milestones, nearly sextupling Tesla’s market cap to $8.5 trillion, delivering 12 million cars a year, and rolling out millions of robotaxis and humanoid robots.
4. Pre-market trading on Friday was a bit of a mixed bag on Wall Street.
Tesla shares bounced back about 1%, recovering some ground after a 3.5% drop the day before, when news broke about Elon Musk’s eye-popping $1 trillion pay package.
Over in the chip sector, things weren’t as upbeat. Nvidia slipped around 0.7% and AMD fell about 1.5%, as investors continued to fret over whether AI stocks are just getting too expensive.
On the brighter side, Peloton surged nearly 8% after beating revenue expectations and upping its forecast for the holiday quarter.
5. Asian markets had a rough day on Friday, dragged down by the global tech sell-off and some disappointing economic data out of China.
Japan’s Nikkei 225 tumbled 1.19% to its lowest level since September, while South Korea’s Kospi sank 1.8% as investors grew increasingly cautious.
The weakness didn’t stop there; European markets also opened on the back foot.
The STOXX 600 dipped 0.54%, the UK’s FTSE 100 lost 0.63%, and Germany’s DAX was down 0.86%. Across the board, worries about stretched tech valuations and lingering geopolitical tensions kept sentiment subdued.
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