U.S. Stock Futures Rise After Tech Market Turmoil

U.S. stock futures showed a notable recovery on Tuesday, bouncing back after a rough day for technology stocks the previous day. All major market indices experienced gains, with the exception of the small-cap Russell 2000 index.

Investors are keeping a close watch on the Federal Reserve's upcoming decision on interest rates, which will be announced this week. This event comes at a time when five out of the seven renowned "Magnificent 7" tech giants are expected to release their earnings reports.

The yield on the 10-year Treasury is currently at 4.57%, while the two-year yield stands at 4.22%. The CME Group's FedWatch tool indicates that there is a 99.5% probability that the Federal Reserve will maintain current interest rates during its announcement on Wednesday.

Futures	Change (+/-)
Nasdaq 100	0.68%
S&P 500	0.38%
Dow Jones	0.04%
Russell 2000	-0.05%

This morning, both the SPDR S&P 500 ETF (SPY) and the Invesco QQQ Trust ETF (QQQ) saw gains in premarket trading. SPY increased by 0.40% to $601.76, while QQQ rose by 0.70% to $517.80, according to data provided by Benzinga Pro.

Market Analysis from Recent Sessions

On Monday, U.S. stock markets closed mixed, with the Nasdaq dropping a significant 3%. The downturn in tech stocks was largely triggered by the announcement that China’s DeepSeek, a tech company, had introduced an open-source AI model that outperformed ChatGPT at lower costs, which raised concerns about the competitive landscape for major tech firms.

Despite this, AT&T Inc.'s (T) earnings report beat expectations, delivering higher values for both earnings and revenue. Additional economic data indicated positive trends, such as an improvement in December's Chicago Fed National Activity Index, reaching a seven-month high of 0.15, alongside a 0.7% rise in U.S. building permits.

While healthcare, financial services, and consumer staples sectors advanced, technology and utilities experienced declines.

Index	Performance (+/-)	Value
Nasdaq Composite	-3.07%	19,341.83
S&P 500	-1.46%	6,012.28
Dow Jones	0.65%	44,713.58
Russell 2000	-1.03%	2,284.02

Analyst Perspectives

Market analysts are paying particular attention to the impact of DeepSeek's developments on tech stocks. Jeremy Siegel, a respected economist from WisdomTree, remarked that such occurrences could disrupt the well-established narrative surrounding the "Magnificent 7" and transition the focus from growth to value investing.

Regarding the forthcoming Federal Open Market Committee (FOMC) decision, Siegel noted that the Fed’s cautious approach supports market stability. He also highlighted that while policies from the previous administration may seem unconventional, they appear to target growth in significant sectors such as AI.

In a recent post, Ryan Detrick from Carson Research noted a strong upward trend in stocks' performance over the past two weeks, explaining that an average of 334.6 stocks advanced daily. Historically, when similar conditions were recorded, as seen in March 2023, the index surged 27% over the following year.

In recent trading sessions, a total of 3,346 stocks in the S&P 500 advanced, marking the best performance for ten days since March 2023. This optimistic trend previously led to four consecutive months of gains for the S&P 500.

Looking Ahead

As investors prepare for the upcoming trading day, several key economic reports will be released:

• Durable goods orders for December will be published at 8:30 a.m. ET.
• November's S&P Case-Shiller home price index for 20 cities will follow at 9:00 a.m. ET.
• Consumer confidence data for January will be announced at 10:00 a.m. ET.

Key Stocks to Watch:

• General Motors Co. (GM) is seeing a premarket uptick of 0.98% as it prepares to report its earnings, with expectations for $1.86 earnings per share and revenue of $43.61 billion.

• Boeing Co. (BA) rose by 0.99% even as analysts predict a quarterly loss of $2.44 per share on $16.17 billion in revenue.

• Starbucks Corp. (SBUX) recorded a minor decline of 0.6% as it gets ready to disclose its quarterly earnings, anticipated at 67 cents per share and revenue of $9.32 billion.

• Brown & Brown Inc. (BRO) saw a significant gain of 2.93% following a positive fourth-quarter earnings report.

• Nucor Corp. (NUE) increased by 0.22% after delivering encouraging fourth-quarter results.

• IMAC Holdings Inc. (BACK) experienced a remarkable rise of 117.13% after launching Ignite Proteomics, focusing on cancer treatment advancements.

• ZK International Group Co. (ZKIN) surged by 52.05% after reporting a year-over-year increase in earnings for FY24.

Global Commodity Updates

In commodities, crude oil futures are trading up by 0.33%, reaching around $73.41 per barrel. The gold spot price has also increased by 0.13%, settling at $2,744.16 per ounce. The Dollar Index is up 0.51%, reaching a level of 107.892.

In international markets, the Asian indices displayed mixed results, with China's CSI 300, Australia's ASX 200, and Japan's Nikkei 225 all declining. Conversely, South Korea's Kospi, Hong Kong's Hang Seng, and India's S&P BSE Sensex posted gains. Meanwhile, European markets recorded upward movements.

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