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Futures Pull Back After Monday's Rally as Dell, HP, and Alphabet Take Center Stage

MarketDash Editorial Team
13 days ago
U.S. stock futures dipped Tuesday following Monday's strong gains, with major tech earnings and a potential Google-Meta chip deal grabbing investor attention. Markets are also digesting Trump's AI-focused Genesis Mission and key economic data releases.

After a strong Monday session that saw the major indices climb, U.S. stock futures decided to take a breather Tuesday morning. It's the natural rhythm of markets: nothing goes straight up forever, and after Monday's gains, a little consolidation makes sense.

The futures picture painted a fairly uniform picture of modest declines. Dow Jones futures slipped 0.15%, S&P 500 futures declined 0.26%, Nasdaq 100 futures fell 0.48%, and Russell 2000 futures dropped 0.27%. Nothing dramatic, but enough to suggest investors are taking a cautious stance before diving back in.

The SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust ETF (QQQ), which track the S&P 500 and Nasdaq 100 respectively, followed suit in premarket trading. The SPY was down 0.20% at $667.39, while the QQQ declined 0.38% to $602.89.

Trump's AI Moonshot

In policy news that's worth noting, President Trump launched what's being called the "Genesis Mission," essentially a Manhattan Project-style effort focused on artificial intelligence. The initiative mobilizes America's 17 National Laboratories with an ambitious goal: building the world's most powerful AI scientific platform.

The stated objective is to double the nation's research productivity within a decade, positioning the U.S. to maintain dominance in energy, national security, and technological innovation. Whether this materializes as advertised remains to be seen, but it signals continued government focus on AI infrastructure at the highest levels.

Bond Yields and Fed Expectations

On the fixed income side, the 10-year Treasury bond yielded 4.03% while the two-year bond sat at 3.49%. Meanwhile, the CME Group's FedWatch tool shows markets pricing in an 80.9% likelihood of the Federal Reserve cutting interest rates at its December meeting. That's a substantial probability, suggesting investors are fairly confident the Fed will deliver another cut before year-end.

Stocks Taking the Spotlight

Dell Technologies Ahead of Earnings

Dell Technologies Inc. (DELL) fell 0.53% in premarket trading Tuesday as investors positioned ahead of the company's earnings report, due out after the closing bell. Analysts are expecting earnings of $2.39 per share on revenue of $27.28 billion.

From a technical perspective, Dell's stock shows a mixed picture. The shares maintain a weaker price trend over the short and medium terms but demonstrate strength in the long-term trend. The company scores well on growth metrics, which makes sense given its positioning in enterprise technology and AI infrastructure.

HP's Quarterly Report Also on Deck

HP Inc. (HPQ) was down 0.16% in premarket as it also prepares to report earnings after the bell. Analysts are looking for earnings of $0.92 per share on revenue of $14.70 billion.

HP's technical picture is less encouraging than Dell's. The stock shows weaker price trends across short, long, and medium-term timeframes, though it does maintain a moderate value ranking. It's a stock that's been struggling to find momentum, and today's earnings report could be a catalyst one way or another.

Alphabet Pops on Meta Chip News

Alphabet Inc. (GOOG) (GOOGL) gained 2.14% in premarket trading following reports that Meta Platforms Inc. (META) could use Google's AI chips in its data centers. This is significant because it suggests Google's chip design efforts, which have been somewhat overshadowed by Nvidia's dominance, are gaining real traction with major customers.

Alphabet maintains stronger price trends across short, medium, and long-term horizons, with a strong quality ranking. The stock has been a steady performer, and news like this Meta deal only reinforces its position in the AI infrastructure race.

Zoom Jumps on Strong Results

Zoom Communications Inc. (ZM) jumped 3.14% higher after posting better-than-expected third-quarter results and raising its fiscal 2026 guidance. The video conferencing company has been working to prove it's more than just a pandemic play, and results like these help that narrative.

The stock shows a weaker price trend over the short term but demonstrates strength in the medium and long terms, with a strong growth ranking. It's a company that's successfully transitioning from explosive pandemic growth to sustainable longer-term expansion.

Semtech Slides on Revenue Miss

Semtech Corp. (SMTC) dropped 5.73% after reporting mixed financial results for the third quarter of fiscal 2026. The semiconductor company's revenue of $267 million missed analyst estimates of $268.83 million, though adjusted earnings of 48 cents per share beat estimates of 45 cents per share.

When you beat on earnings but miss on revenue, investors tend to focus on the top-line disappointment. Semtech maintains a weaker price trend over the short term but shows strength in the medium and long terms, with a poor value ranking. The stock has momentum issues in the near term that today's results probably won't help.

How Monday Wrapped Up

Monday was a strong day for equities, with communication services, information technology, and consumer discretionary stocks leading the charge. Consumer staples and energy names bucked the trend to close lower, but the broader market showed solid strength.

The Nasdaq Composite surged 2.69% to close at 22,872.01, leading the major indices. The S&P 500 gained 1.55% to reach 6,705.12, while the Dow Jones added 0.44% to finish at 46,448.27. The Russell 2000 climbed 1.89% to close at 2,414.28, showing that small-caps participated in the rally as well.

What the Analysts Are Saying

LPL Research is presenting a resilient outlook for the U.S. economy and equity markets, pointing to robust corporate adaptability as a key supporting factor. Despite potential headwinds from tariffs, companies have successfully protected margins, and GDP growth could reach an annualized 3%, according to their analysis.

The report notes that "expectations keep rising, the bar keeps going higher, and corporate America continues to clear it handily." That's been the story of this economic cycle: repeated predictions of slowdown that haven't materialized, with corporations continuing to deliver.

Looking ahead, AI-driven productivity is expected to be a primary tailwind for corporate profitability. LPL forecasts S&P 500 operating margins to exceed 17.5% within a year, which would represent historically strong profitability levels.

There's a catch, though. Current valuations reflect significant optimism, which means even earnings beats are generating muted price reactions. When good news is already priced in, it takes exceptional results to move stocks higher. Given this dynamic, LPL maintains a "tactical neutral stance on equities."

Despite near-term risks, LPL believes the broader market's long-term uptrend remains intact, potentially creating a "dip buying opportunity between now and year-end." In other words, they're not bearish, just cautious in the immediate term.

From a sector perspective, the firm continues to favor large-cap growth stocks and the communication services sector. Their reasoning is straightforward: the "earnings growth gap between mega cap tech and the rest of the market is still huge." When growth is concentrated in large-cap tech, that's where investors should be positioned.

Economic Data on the Calendar

Tuesday brings a flood of economic data that investors will be parsing carefully. At 8:30 a.m. ET, we'll get September's delayed U.S. retail sales figures, along with headline and core Producer Price Index data.

At 9:00 a.m., September's S&P Case-Shiller home price index for 20 cities will be released. Then at 10:00 a.m. ET, we'll see August's delayed business inventories data, November's consumer confidence data, and October's pending home sales data.

That's a lot of information hitting the market in a short window, and any of these releases could move markets if they deviate significantly from expectations. Consumer confidence in particular will be closely watched as a gauge of how Americans are feeling about the economy heading into year-end.

Commodities, Crypto, and Global Markets

Crude oil futures were trading lower by 0.97% in the early New York session, hovering around $58.35 per barrel. Oil has been relatively weak lately, reflecting concerns about demand and geopolitical shifts.

Gold pulled back 0.21% to trade around $4,126.17 per ounce. That's still well above where gold traded for most of the past few years, though it's off its recent record high of $4,381.60 per ounce. The U.S. Dollar Index was down 0.07% at the 100.0670 level, showing minimal movement.

Bitcoin (BTC) was trading 0.97% higher at $86,729.35, continuing its recent pattern of modest gains and consolidation after the big run-up earlier this year.

Asian markets closed higher on Monday with one notable exception: India's NIFTY 50 index declined. Hong Kong's Hang Seng, Australia's ASX 200, China's CSI 300, Japan's Nikkei 225, and South Korea's Kospi indices all rose. European markets were mostly higher in early trading Tuesday, suggesting a generally positive global sentiment despite the pullback in U.S. futures.

All in all, it's shaping up to be a day of consolidation and data digestion. After Monday's rally, a pause makes sense, particularly with major earnings reports and economic data on the horizon. The question is whether the positive momentum from Monday carries forward or whether we see more significant profit-taking as the week progresses.

Back to News

Futures Pull Back After Monday's Rally as Dell, HP, and Alphabet Take Center Stage

MarketDash Editorial Team
13 days ago
U.S. stock futures dipped Tuesday following Monday's strong gains, with major tech earnings and a potential Google-Meta chip deal grabbing investor attention. Markets are also digesting Trump's AI-focused Genesis Mission and key economic data releases.

After a strong Monday session that saw the major indices climb, U.S. stock futures decided to take a breather Tuesday morning. It's the natural rhythm of markets: nothing goes straight up forever, and after Monday's gains, a little consolidation makes sense.

The futures picture painted a fairly uniform picture of modest declines. Dow Jones futures slipped 0.15%, S&P 500 futures declined 0.26%, Nasdaq 100 futures fell 0.48%, and Russell 2000 futures dropped 0.27%. Nothing dramatic, but enough to suggest investors are taking a cautious stance before diving back in.

The SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust ETF (QQQ), which track the S&P 500 and Nasdaq 100 respectively, followed suit in premarket trading. The SPY was down 0.20% at $667.39, while the QQQ declined 0.38% to $602.89.

Trump's AI Moonshot

In policy news that's worth noting, President Trump launched what's being called the "Genesis Mission," essentially a Manhattan Project-style effort focused on artificial intelligence. The initiative mobilizes America's 17 National Laboratories with an ambitious goal: building the world's most powerful AI scientific platform.

The stated objective is to double the nation's research productivity within a decade, positioning the U.S. to maintain dominance in energy, national security, and technological innovation. Whether this materializes as advertised remains to be seen, but it signals continued government focus on AI infrastructure at the highest levels.

Bond Yields and Fed Expectations

On the fixed income side, the 10-year Treasury bond yielded 4.03% while the two-year bond sat at 3.49%. Meanwhile, the CME Group's FedWatch tool shows markets pricing in an 80.9% likelihood of the Federal Reserve cutting interest rates at its December meeting. That's a substantial probability, suggesting investors are fairly confident the Fed will deliver another cut before year-end.

Stocks Taking the Spotlight

Dell Technologies Ahead of Earnings

Dell Technologies Inc. (DELL) fell 0.53% in premarket trading Tuesday as investors positioned ahead of the company's earnings report, due out after the closing bell. Analysts are expecting earnings of $2.39 per share on revenue of $27.28 billion.

From a technical perspective, Dell's stock shows a mixed picture. The shares maintain a weaker price trend over the short and medium terms but demonstrate strength in the long-term trend. The company scores well on growth metrics, which makes sense given its positioning in enterprise technology and AI infrastructure.

HP's Quarterly Report Also on Deck

HP Inc. (HPQ) was down 0.16% in premarket as it also prepares to report earnings after the bell. Analysts are looking for earnings of $0.92 per share on revenue of $14.70 billion.

HP's technical picture is less encouraging than Dell's. The stock shows weaker price trends across short, long, and medium-term timeframes, though it does maintain a moderate value ranking. It's a stock that's been struggling to find momentum, and today's earnings report could be a catalyst one way or another.

Alphabet Pops on Meta Chip News

Alphabet Inc. (GOOG) (GOOGL) gained 2.14% in premarket trading following reports that Meta Platforms Inc. (META) could use Google's AI chips in its data centers. This is significant because it suggests Google's chip design efforts, which have been somewhat overshadowed by Nvidia's dominance, are gaining real traction with major customers.

Alphabet maintains stronger price trends across short, medium, and long-term horizons, with a strong quality ranking. The stock has been a steady performer, and news like this Meta deal only reinforces its position in the AI infrastructure race.

Zoom Jumps on Strong Results

Zoom Communications Inc. (ZM) jumped 3.14% higher after posting better-than-expected third-quarter results and raising its fiscal 2026 guidance. The video conferencing company has been working to prove it's more than just a pandemic play, and results like these help that narrative.

The stock shows a weaker price trend over the short term but demonstrates strength in the medium and long terms, with a strong growth ranking. It's a company that's successfully transitioning from explosive pandemic growth to sustainable longer-term expansion.

Semtech Slides on Revenue Miss

Semtech Corp. (SMTC) dropped 5.73% after reporting mixed financial results for the third quarter of fiscal 2026. The semiconductor company's revenue of $267 million missed analyst estimates of $268.83 million, though adjusted earnings of 48 cents per share beat estimates of 45 cents per share.

When you beat on earnings but miss on revenue, investors tend to focus on the top-line disappointment. Semtech maintains a weaker price trend over the short term but shows strength in the medium and long terms, with a poor value ranking. The stock has momentum issues in the near term that today's results probably won't help.

How Monday Wrapped Up

Monday was a strong day for equities, with communication services, information technology, and consumer discretionary stocks leading the charge. Consumer staples and energy names bucked the trend to close lower, but the broader market showed solid strength.

The Nasdaq Composite surged 2.69% to close at 22,872.01, leading the major indices. The S&P 500 gained 1.55% to reach 6,705.12, while the Dow Jones added 0.44% to finish at 46,448.27. The Russell 2000 climbed 1.89% to close at 2,414.28, showing that small-caps participated in the rally as well.

What the Analysts Are Saying

LPL Research is presenting a resilient outlook for the U.S. economy and equity markets, pointing to robust corporate adaptability as a key supporting factor. Despite potential headwinds from tariffs, companies have successfully protected margins, and GDP growth could reach an annualized 3%, according to their analysis.

The report notes that "expectations keep rising, the bar keeps going higher, and corporate America continues to clear it handily." That's been the story of this economic cycle: repeated predictions of slowdown that haven't materialized, with corporations continuing to deliver.

Looking ahead, AI-driven productivity is expected to be a primary tailwind for corporate profitability. LPL forecasts S&P 500 operating margins to exceed 17.5% within a year, which would represent historically strong profitability levels.

There's a catch, though. Current valuations reflect significant optimism, which means even earnings beats are generating muted price reactions. When good news is already priced in, it takes exceptional results to move stocks higher. Given this dynamic, LPL maintains a "tactical neutral stance on equities."

Despite near-term risks, LPL believes the broader market's long-term uptrend remains intact, potentially creating a "dip buying opportunity between now and year-end." In other words, they're not bearish, just cautious in the immediate term.

From a sector perspective, the firm continues to favor large-cap growth stocks and the communication services sector. Their reasoning is straightforward: the "earnings growth gap between mega cap tech and the rest of the market is still huge." When growth is concentrated in large-cap tech, that's where investors should be positioned.

Economic Data on the Calendar

Tuesday brings a flood of economic data that investors will be parsing carefully. At 8:30 a.m. ET, we'll get September's delayed U.S. retail sales figures, along with headline and core Producer Price Index data.

At 9:00 a.m., September's S&P Case-Shiller home price index for 20 cities will be released. Then at 10:00 a.m. ET, we'll see August's delayed business inventories data, November's consumer confidence data, and October's pending home sales data.

That's a lot of information hitting the market in a short window, and any of these releases could move markets if they deviate significantly from expectations. Consumer confidence in particular will be closely watched as a gauge of how Americans are feeling about the economy heading into year-end.

Commodities, Crypto, and Global Markets

Crude oil futures were trading lower by 0.97% in the early New York session, hovering around $58.35 per barrel. Oil has been relatively weak lately, reflecting concerns about demand and geopolitical shifts.

Gold pulled back 0.21% to trade around $4,126.17 per ounce. That's still well above where gold traded for most of the past few years, though it's off its recent record high of $4,381.60 per ounce. The U.S. Dollar Index was down 0.07% at the 100.0670 level, showing minimal movement.

Bitcoin (BTC) was trading 0.97% higher at $86,729.35, continuing its recent pattern of modest gains and consolidation after the big run-up earlier this year.

Asian markets closed higher on Monday with one notable exception: India's NIFTY 50 index declined. Hong Kong's Hang Seng, Australia's ASX 200, China's CSI 300, Japan's Nikkei 225, and South Korea's Kospi indices all rose. European markets were mostly higher in early trading Tuesday, suggesting a generally positive global sentiment despite the pullback in U.S. futures.

All in all, it's shaping up to be a day of consolidation and data digestion. After Monday's rally, a pause makes sense, particularly with major earnings reports and economic data on the horizon. The question is whether the positive momentum from Monday carries forward or whether we see more significant profit-taking as the week progresses.