US stock futures experienced a mixed day as the market digested the latest Personal Consumption Expenditures (PCE) inflation data and looked ahead to Nvidia's highly anticipated earnings report. The Nasdaq 100 futures dipped 0.42%, while S&P 500 futures saw a smaller decline of 0.31%. This divergence highlights a particular weakness in technology shares compared to the broader market, as investors await further clarity on inflation and corporate performance in the AI sector.
Nvidia, a key bellwether for artificial intelligence investments, saw its shares decline by 0.78% to $213.05 in pre-market trading, down $1.67 from its previous close of $214.72. The stock traded within a wider-than-usual pre-market range of $4.62, between $210.11 and $214.73, indicating heightened volatility. Block trade activity for Nvidia increased by 37% compared to its 30-day average, suggesting significant institutional interest and repositioning ahead of its earnings release, scheduled for after market close.
The PCE index, the Federal Reserve's preferred inflation gauge, was released this morning. Consensus estimates projected core PCE inflation at 2.6% year-over-year and 0.2% monthly growth. A reading above 0.3% monthly growth would likely reinforce hawkish Fed expectations, while a sub-0.1% growth could revive rate cut probabilities. Current market pricing suggests a 47% chance of a rate cut at the September FOMC meeting, a decrease from 63% a month ago, making inflation data even more critical for market direction.
Within the semiconductor sector, performance was mixed. Advanced Micro Devices (AMD) declined by 0.51% to $148.92, while Intel gained 0.23% to $32.15. This variance suggests investors are differentiating between companies based on their exposure to AI versus traditional computing segments. Tech sector exchange-traded funds (ETFs) experienced $487 million in net outflows during the early session, continuing a trend that has seen $2.1 billion leave the sector over the past five trading days, indicating institutional repositioning ahead of these major events.
Market depth metrics for Nvidia indicated thinning liquidity, with bid-ask spreads widening to 0.18% of the share price, double the average during regular trading hours. Open interest in weekly options expiring post-earnings increased by 42,000 contracts, with put option volume exceeding call volume by a 1.3:1 ratio. This suggests increased hedging or speculative bets on potential downside movement following the earnings announcement. Technical support for Nvidia is seen at $208.50, its 50-day moving average, with resistance at $219.80, the recent high from August 21.
