U.S. Futures Mixed as Rate-Cut Hopes Fade; Tech Under Pressure Despite Nvidia Beat

U.S. stock futures were mixed early Friday after a whipsaw session, with traders further dialing back expectations for a Federal Reserve rate cut in December. At 05:00 ET (10:00 GMT), Dow Jones futures rose 0.3%, while S&P 500 futures slipped 0.1% and Nasdaq 100 futures fell 0.5%.

Week-to-date: risk-off tone

All three major indexes are poised for weekly losses after Thursday’s slide: the S&P 500 -2.9%, Dow -~3%, and Nasdaq -3.6%. A stronger-than-expected, delayed September NFP report further undermined the odds of a near-term policy easing, overshadowing otherwise solid results and upbeat guidance from Nvidia (NVDA).

AI euphoria vs. valuation anxiety

Nvidia’s outlook reaffirmed robust AI demand, but concerns persist about an AI-driven valuation bubble. Investor Michael Burry warned true end-demand may lag expectations. Still, Capital Economics argued that if an AI boom deflates, the correction could be smaller and shorter than the post-dotcom bust.

Rates: December cut odds retreat

After the NFP beat and October Fed minutes highlighting a divided FOMC, markets now price roughly a 31% chance of a 25 bps December cut (from 45.8% last week). Friday’s S&P Global PMIs and final November consumer sentiment are next catalysts.

Retail in focus

Earnings attention turns to BJ’s Wholesale (BJ) pre-open. Gap (GPS) gained premarket after beating Q3 comp expectations on strong Old Navy and Banana Republic demand. Ross Stores (ROST) also advanced after topping estimates, citing an “excellent” back-to-school season with momentum through quarter-end.

Bottom line: The tape remains headline-driven. Strong AI prints aren’t fully offsetting macro uncertainty and fading December cut hopes, leaving tech vulnerable and defensives bid into Friday’s data.