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Investing.com – U.S. stock futures edged lower on Tuesday, pointing to a possible pullback from the previous session's gains, driven in part by a rally in shares of chip designer Nvidia (NASDAQ:). Elsewhere, two airlines are reportedly discovering loose parts on some of their grounded models of Boeing's (NYSE:) 737 Max 9 jet. Week.
1. Futures are trending downward
U.S. stock futures fell lower on Tuesday, signaling a negative start to the trading day following a rise on Wall Street earlier in the week.
As of 4:59 a.m. ET (09:59 GMT), the contract had lost 112 points, or 0.3%, had lost 13 points, or 0.3%, and was down 63 points, or 0.4%.
Key averages jumped in the previous session, with tech-heavy stocks in particular notching their best day since mid-November. Contributing to the gains was the strength of chip designer and AI darling Nvidia, which rose 6.4% (see below).
Even a plunge in Boeing shares after another incident involving the plane maker's 737 Max jet wasn't enough to wipe out a 0.6% rise in the 30 shares. The benchmark gained 1.4% over the course of the day.
Traders are also keeping an eye on key U.S. inflation later in the week, which could impact how Federal Reserve policymakers approach potential interest rate cuts in 2024.
2. Nvidia hits new record high
Nvidia shares closed at a new record high of $522.53 on Monday, a sign of investor excitement over the chipmaker's unveiling of new desktop graphics processors.
Nvidia announced its new GeForce RTX 40 SUPER series graphics processors ahead of a high-profile consumer electronics conference in Las Vegas. In a statement, the US-based group said the chips, along with a range of other products, will “accelerate gaming and creating.”
The company, best known as the developer of computer chips that power artificial intelligence, has become the epitome of the recent surge in enthusiasm for the emerging technology. The hype caused the stock price to triple last year, pushing its market value to nearly $1.3 trillion.
Nvidia shares were the most traded on Wall Street in yesterday's session, with traders exchanging over $32 billion worth of shares, Reuters reported, citing LSEG data.
3. Samsung estimates the decline in operating profit
Samsung Electronics (KS:) said Tuesday that its fourth-quarter operating profit likely fell about 35% as a sluggish recovery in demand for the company's key memory and smartphone chips hit sales.
Samsung's operating profit is expected to have fallen to 2.8 trillion won ($2.1 billion) in the three months ended Dec. 31 from 3.7 trillion won a year ago. The company has not reported a year-over-year profit increase since the second quarter of 2022. Sales also fell to 67.40 trillion won from 70.46 trillion won a year ago, missing Investing.com estimates of 70.1 trillion won.
The numbers seemed to indicate that Samsung is still struggling with a slowdown in chip demand over the past two years. Rising interest rates and high inflation have caused many consumers to dramatically reduce their spending, dampening demand for more expensive items such as electronics and leading to oversupply.
However, analysts expect a turnaround in the industry this year thanks to growing demand for high-tech AI chips. “Supply and demand dynamics are now a tailwind,” Morgan Stanley analysts said in a note to clients.
Seoul-listed shares of the South Korean conglomerate, which will release a full earnings report on Jan. 31, fell 2.4%.
4. Boeing's latest 737 Max crisis deepens
United Airlines and Alaska Airlines have reportedly discovered loose parts on some grounded models of Boeing's 737 Max 9 jet, as the crisis surrounding the plane maker deepens following the dangerous mid-air fuselage failure last week.
According to a statement from United cited by industry publication The Air Current, preliminary inspections of the 737 Max 9 revealed that the aircraft had “instances that appeared to be related to installation problems in the door plug.” Those issues included screws on several panels that “required additional tightening,” the carrier noted.
Alaska Airlines also said Monday that initial reports from its technicians had found “loose hardware” on some of its 737 Max 9s.
Concern about the Max 9 – a version of Boeing's single-aisle plane that has about 10 more seats than the popular Max 8 – has increased since a panel on an Alaska Airlines flight from Portland, Oregon Flight exploded in Ontario, California last Friday. The pilots managed to turn the jet around and land it safely.
5. Gross customs higher
Oil prices rose slightly on Tuesday, rebounding from sharp losses in the previous session, as traders digested concerns about sluggish demand as well as tensions in the Middle East.
At 4:59 a.m. ET, futures were trading 1.8% higher at $72.04 a barrel, while the contract rose 1.8% to $77.47 a barrel.
Both crude oil benchmarks fell over 3% on Monday as sharp price cuts by top exporter Saudi Arabia sparked fears of slowing crude demand, particularly among major Asian consumers.
However, the ongoing conflict between Israel and Hamas and fears that it could develop into a regional crisis that could disrupt oil supplies in the Middle East remain a fundamental support for the crude oil market.
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