After a record-setting session that sent the S&P 500 and Dow Jones Industrial Average to new highs, Nasdaq futures slipped by 0.5 percent in early Friday trading, underscoring the fragile balance between optimism and caution on Wall Street. Investors are now caught between the momentum of strong market rallies and the sobering weight of fresh inflation risks and disappointing tech earnings.
At the center of the unease is the upcoming release of the Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred inflation gauge. Scheduled for today, this data has the potential to reshape expectations around September’s policy meeting. While many traders are still anticipating rate cuts later this year, any surprise showing stubborn inflationary pressures could slow or derail those hopes. With monetary policy hanging in the balance, futures are reflecting a defensive posture as traders hedge against unwelcome surprises.
Adding to the pressure is weakness in the technology sector, which has been the main driver of this year’s bull market. Dell Technologies shares are down nearly 6 percent after issuing cautious guidance, while Marvell Technology plunged about 13 percent in pre-market trading on disappointing forecasts. Given their role as key suppliers to the broader semiconductor and AI ecosystems, these earnings rattled confidence across the Nasdaq, amplifying concerns that demand in certain segments of the tech industry may be tapering.
Even Nvidia, whose earnings earlier this week affirmed the explosive demand for AI chips, slipped about 1 percent in early trade. The company’s decision to exclude Chinese sales from its guidance reinforced investor unease over the durability of international demand in the face of geopolitical restrictions. For a market that has leaned heavily on Nvidia as the bellwether for AI optimism, even a minor dip carries symbolic weight.
Together, these dynamics explain why Nasdaq futures are retreating despite broader equity markets enjoying one of their strongest runs of the summer. Traders are simultaneously celebrating a historic rally and bracing for the possibility of a cooler narrative shaped by inflation data and cracks in the tech sector’s near-term earnings outlook. What emerges from today’s inflation print may determine whether the Nasdaq resumes its upward march—or whether caution sets the tone heading into September.