What’s Driving the Markets Today?

U.S. stock index futures are slightly lower as markets prepare for the release of closely watched – and delayed – economic data. Investors will get a look at indicators such as retail sales and the producer price index, among other data, while Federal Reserve officials discuss the trajectory of U.S. interest rates. Google is reportedly stepping up efforts to compete with Nvidia in the AI chip race, while server provider Dell is set to release its latest earnings.

1. Futures Slightly Lower
U.S. stock futures are moving lower on Tuesday, showing some caution among investors ahead of a key batch of economic data this week.

As of 2:35 a.m. ET (07:35 GMT), Dow futures were down 42 points (0.1%), S&P 500 futures fell 7 points (0.1%), and Nasdaq 100 futures dropped 46 points (0.2%).

Wall Street’s major indices rose on Monday, kicking off the shortened trading week for the Thanksgiving holiday.

Sentiment was supported by comments from Fed officials, which boosted hopes for a rate cut at the central bank’s next meeting in December.

These expectations helped offset concerns about a potential AI bubble, with worries focused on the sustainability of massive and increasingly debt-financed investments in new technology infrastructure.

Analysts at Vital Knowledge noted that this bearish narrative is showing signs of “stabilization.”

“Money isn’t leaving AI; it’s being redirected,” they said, noting that capital is flowing into Google and chipmaker Broadcom to take advantage of Google’s new Gemini model and powerful AI-optimized processors. They added that this creates “more comfort for the outlook of a year-end rally,” though investors remain cautious after the recent wave of volatility.

2. Key Economic Data
Attention now turns to the economic calendar, which is again full of important indicators following the end of a record-long government shutdown.

The temporary closure delayed some of these indicators, depriving markets and rate-setters of key information for investment and borrowing decisions.

On Tuesday, retail sales and producer price growth data are expected. Consumer spending remains a key driver of the U.S. economy, accounting for more than two-thirds of activity, while inflation appears stubbornly high.

However, due to the length of the shutdown, the data only covers September, and analysts note that the economic situation may have already changed compared to two months ago.

3. Fed Officials on Rate Expectations
Amid this uncertainty, the Fed faces a difficult decision at its December meeting.

Officials are expected to be divided on whether to cut rates for a third consecutive meeting or keep borrowing costs at the current target range of 3.75%–4%.

Mary Daly (San Francisco Fed) and Christopher Waller support the first option, emphasizing the priority of supporting the weakening labor market over inflation. Following these comments, the odds of a 25-basis-point cut in December rose.

Meanwhile, other Fed members express caution about a reduction in a context where the central bank lacks the latest economic data and are wary of the post-December rate trajectory.

According to the Wall Street Journal, the final decision will be made by Fed Chair Jerome Powell, with each option carrying its own risks.

4. Meta and Google Discuss TPU Deal – The Information
Google is accelerating its efforts to compete with Nvidia in the AI chip race, while Meta Platforms emerges as a potential multi-billion-dollar client, reports The Information.

For years, Google restricted its TPUs (Tensor Processing Units) to its own cloud centers, renting them out for large AI projects. Now Google is offering the chips for use in clients’ own centers, marking a major strategic shift.

One such client is Meta, owner of Facebook and Instagram. The company is discussing TPU integration in its centers from 2027 and also plans to rent capacity from Google Cloud starting next year. Currently, Meta relies mainly on Nvidia GPUs for its AI infrastructure.

In premarket trading, Alphabet shares rose while Nvidia fell more than 2%.

5. Dell to Report Earnings
Additional corporate earnings reports are expected today as the quarterly reporting period winds down.

Dell Technologies will lead the results after Wall Street closes. The company, whose clients include CoreWeave and Elon Musk’s AI startup xAI, nearly doubled its four-year annual profit growth target in October, reflecting its large investment in the growing demand for AI model servers.

Annual growth in adjusted earnings per share is expected to be at least 15%, up from around 8% previously. Revenue is forecast to rise between 7% and 9% year over year, compared to the previous 3%–4% estimate.

Rising server spending positions Dell as one of the main beneficiaries of the AI boom, though analysts caution about risks from strong competition and high costs, which could compress profit margins.