Nasdaq, S&P 500 Eye Rebound Amid Shutdown Resolution Hopes — Strategist Downplays AI Pessimism

• The Trump administration has reportedly decided to ban the export of Nvidia’s latest China-specific B30A chip.
• A Politico report, citing sources, stated that a vote on the government shutdown will likely be held in the Senate.
• A few Fed speeches and a consumer sentiment reading are among the key economic catalysts on investors' radar.

U.S. stock futures pointed up early Friday, suggesting that major indices may end a volatile week on a positive note. The signals emerging from Washington indicate that a deal may soon be reached among lawmakers to end the government shutdown, which has now lasted a record 38 days.

Senate Majority Leader John Thune (R-S.D.) has told fellow Republicans in a private lunch that he would hold a vote in the upper house on Friday, paving the way for the end of the impasse, Politico reported, citing two people in the room. According to the report, Thune would bring up the continuing resolution passed by the House, make amendments to it with a new expiration date, likely in January.

Even as artificial intelligence (AI) skepticism abounds, a report said the Trump administration has decided to ban the export of Nvidia’s latest China-specific B30A chip.

Weighing in on the AI debate, LPL Head of Equity Research Thomas Shipp said, “We believe these concerns are legitimate and each dollar invested in AI raises the bar for the expected payoff.” That said, the strategist said the momentum behind this theme is strong.  “Earnings expectations are still growing; the synergies between AI and quantum computing remain unknown, and the current administration appears aligned with AI initiatives.”

How Futures Are Trading

As of 3 a.m. ET on Thursday, the Nasdaq 100, S&P 500, Dow, and Russell 2000 futures rose 0.40%, 0.31%, 0.23% and 0.51%, respectively.

On Stocktwits, retail sentiment toward the SPDR S&P 500 ETF (SPY), an exchange-traded fund that tracks the S&P 500 Index, remained ‘bearish’ as of early Friday.  Retail sentiment toward the Invesco QQQ Trust (QQQ) ETF, which tracks the Nasdaq 100 Index, ticked up to a ‘neutral’ level from the ‘bearish’ mood seen the day before.  The message volumes on the SPY and QQQ streams were at ‘high’ levels.

Commenting on the QQQ stream, a retail watcher sensed déjà vu.  “Selling the hype and promising explosive growth is exactly what Enron did. Quantum and AI is not much different,” they said.

While referencing the news about the Nvidia chip ban, another user suggested that the QQQ could retrace to a five-year low near $270.

How Markets Fared Thursday

IT stocks dragged the broader market and the other major indices sharply lower on Thursday. Consumer discretionary stocks also came under intense selling pressure, while energy and healthcare stocks bucked the downtrend. Fears of an AI bubble burst have been heightened as Wall Street firms and industry experts continue to express pessimism about the sustainability of the AI revolution, which has been the major market driver since the start of 2023.

The SPY,  QQQ,  SPDR Dow Jones Industrial Average ETF Trust (DIA), and the iShares Russell 2000 ETF (IWM) slumped 1.07%, 1.86%, 0.81% and 1.77%, respectively.

Key Catalysts To Watch Out For

On the economic front, the University of Michigan is scheduled to release its preliminary consumer sentiment index for November at 10 a.m. ET. The Federal Reserve is due to release its September report on outstanding consumer credit at 3 p.m. ET.

Fed Vice Chair Philip Jefferson is scheduled to speak at 7 a.m. ET, and Fed Governor Stephen Miran will make a public appearance at 3 p.m. ET.

Noteworthy names featured on the earnings calendar for the day are Constellation Energy (CEG), DoubleVerify (DV), Duke Energy (DUK), Fluor (FLR), Six Flags Entertainment (FUN) and Wendy’s (WEN).

How Other Markets Fared

Crude oil futures traded up over 1% early Friday, and gold futures also firmed up. The 10-year U.S. Treasury note yield, which had fallen below the 4.1% mark on Thursday, is reversing course early on Friday. The U.S. dollar is slightly firmer. Dragged by the negative cues from Wall Street, Asian stocks pulled back on Friday.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Read Next: Jensen Huang Warns China Just 'Nanoseconds' Behind US In AI Race After $85B Nvidia Selloff

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