(Bloomberg) — US stock futures fluctuated as traders awaited earnings from a trio of big-tech companies and the Federal Reserve’s interest-rate decision.
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Contracts on the Nasdaq 100 were little changed, while futures on the S&P 500 dipped 0.2%. While shares of T-Mobile US Inc. rallied 7% in premarket trading on strong results, other big tech names like Nvidia Corp, Apple Inc. and Microsoft Corp were trading lower. The yield on 10-year Treasuries was little changed at 4.53%.
Traders will be scouring results from Microsoft, Meta and Tesla Inc. later for signs of weakness after Chinese startup DeepSeek’s cheaper AI model rattled markets. While the Fed is widely expected to hold rates, Chair Jerome Powell is likely to be pressed on the inflationary impact of potential trade tariffs and other policies from President Donald Trump’s White House.
“I don’t think there’s any great desire for the Fed to become overly hawkish in their messaging, nor do I think they’re going to pre-commit to dovish loosening,” Guy Miller, chief strategist at Zurich Insurance Co., said. “They’ll say ‘look, we need a period to take stock of things.’”
Traders ratcheted up bullish bets in the hope that Powell signals a cut in March is firmly on the table.
JPMorgan Chase & Co.’s latest client survey released Tuesday shows the biggest net long position in US government debt in almost 15 years. Open interest in futures — or the amount of new risk held by traders — is increasing in 10-year note contracts. And Federated Hermes Inc. is pushing out maturities in its money market funds close to the maximum limit — a bet there’s more easing to come.
Central banks elsewhere look to be on an easing path, with the Bank of Canada likely to reduce rates by a quarter point Wednesday. The European Central Bank is also expected to cut tomorrow.
Traders Bet ECB Will Need to Deepen and Accelerate Rate Cuts
Tech Earnings
While profits from the so-called Magnificent Seven tech companies are still rising — and far outpacing the rest of the market — growth is projected to come in at the slowest pace in almost two years.
The stakes are rising after the DeepSeek news. The US tech behemoths are under increasing scrutiny for their investments in artificial intelligence and the meager returns they’re generating from the technology.