As of 8:30am CT on Tuesday, the stock market is catching its breath. After Monday’s electric rally sent the Nasdaq to a record close, stock futures are barely moving this morning, as if the whole market is sitting on the edge of the couch waiting to see what happens next. Dow E-minis were up just 12 points, or 0.02%, S&P 500 E-minis slipped 6.25 points, or 0.08%, and Nasdaq 100 E-minis were down 17.5 points, or 0.06%, according to Reuters.
Let’s remember what Monday felt like, because it was something. The tech-heavy Nasdaq Composite surged about 2.3% to a record closing high, Investopedia reported, while the S&P 500 jumped 1.49% and the Dow added 0.71%. The S&P now sits within 0.4% of its own record set back on August 13. For anyone watching their 401(k) this year, these are the mornings that make the roller coaster feel worth it.
The hero of Monday’s story was Meta. Shares of the company soared 11.3% after analysts pointed to its new Muse AI agent garnering more downloads in its first 13 days than ChatGPT, Reuters reported. That is a sentence worth pausing on. A new app, barely two weeks old, already out-downloading the name that defined the AI boom. UBS analysts told clients that Muse “provides early evidence that consumer AI agents could achieve broad adoption, offering new AI monetization opportunities beyond enterprise application.”
Advanced Micro Devices joined the party too, jumping 10% on Monday to an all-time high that pushed its market capitalization above $1 trillion for the first time, per Investopedia. Intel climbed 12% as well. This morning, though, the AI trade is taking a small step back: Nvidia eased 0.2% and the U.S.-listed shares of TSMC and SK Hynix lost more than 1% each in premarket trading, according to Reuters.
Across the Pacific, the mood was cautiously upbeat. The Hang Seng and Shanghai Composite rose 0.2% and 0.1% respectively, the KOSPI gained 0.2%, and Taiwan’s Taiex finished just 0.2% higher but still settled at a record high on strength in chip and electronics names like Mediatek, United Microelectronics and Alchip Technologies, Sharecast reported. Japan’s market was closed for a public holiday. Alibaba jumped around 5% in Hong Kong after rolling out the Zhenwu V900 chip, which it says is three times as powerful as its previous version.
Europe opened on a steadier note. The pan-European STOXX 600 was flat at 642.32 points in early trading, Reuters reported, with retail shares a bright spot, up 1.3%, after home improvement retailer Kingfisher raised its full-year profit guidance following a 9.9% jump in first-half profit.
Meanwhile, two things that have been driving market sentiment all month kept cooling: oil prices and bond yields. WTI crude futures fell nearly 3% to about $93 a barrel, down for the fifth straight day, while Brent slipped below the $100 mark, per Investopedia. The 10-year Treasury yield sat at 4.93%, down from 4.96% at Monday’s close and well off last week’s high of 5.04%, its highest point since 2007. Bitcoin traded around $86,000, down from Monday’s peak of $87,400, its highest price since January, and gold futures slipped 0.5% to $4,360 an ounce.
The individual premarket movers told their own smaller stories. Vicor Corp. surged 9.6% and On Holding rose 6.3% ahead of its investor day, while OneMain Holdings, Grab Holdings and W.W. Grainger each gained at least 5%. On the other side, First Citizens Bancshares tumbled 17.8% and Labcorp Holdings fell 5.9%, Barron’s reported.
Why this matters: Monday’s rally was the market’s way of saying it still believes in the AI story, at least for now. But futures this morning say traders want proof before they pile in further. A pause after a record is healthy. What happens at the open will tell us whether Monday’s optimism has legs or whether it was just a one-day celebration.
What to watch next: the opening bell at 8:30am CT will show whether the AI trade picks up where it left off or cools further. Also on today’s plate: remarks from at least three Fed officials, euro zone consumer confidence data, and any fresh headlines from the UN General Assembly, where diplomats are circling around possible U.S.-Iran talks. If oil keeps falling and yields keep easing, the path to another record for the S&P looks clearer. If not, buckle up.
