By Twesha Dikshit and Purvi Agarwal
Feb 10 (Reuters) – U.S. stock index futures were subdued on Tuesday after a sharp rally in the previous session as tech stocks bounced off a bruising rout, while investor focus turned to retail sales numbers that kick off a series of key data releases this week.
The Dow notched its second consecutive closing record high on Monday, while the S&P 500 closed a few points shy of its January peak.
Despite being knocked back by the tech selloff last week, the Nasdaq is about 3% away from its all-time high, with diversification away from pricey tech shares helping undervalued pockets of the market, including small- and mid-cap companies.
At 07:17 a.m. ET, Dow E-minis rose 6 points, or 0.01%, S&P 500 E-minis added 10 points, or 0.14%, and Nasdaq 100 E-minis were up 42.5 points, or 0.17%.
This week’s focus will be on the delayed nonfarm payrolls data, followed by crucial inflation numbers that could influence expectations for the U.S. Federal Reserve’s monetary policy path.
White House economic adviser Kevin Hassett said on Monday that U.S. job gains could be lower in the coming months due to slower labor force growth and higher productivity.
“Hassett’s comments were aimed at resetting expectations for what ‘normal’ job growth looks like as population growth slows and productivity improves,” said Miles Sampson, vice president and head of asset allocation research at Franklin Templeton Investment Solutions.
“Slower payroll gains can still be consistent with trend growth… and a sequence of smaller prints should not automatically trigger panic.”
Markets currently expect the Fed to keep rates on hold until June, at which point U.S. President Donald Trump’s Fed chair nominee, Kevin Warsh, could take the helm at the central bank, if confirmed by the Senate.
Federal Reserve policymakers Beth Hammack and Lorie Logan are scheduled to speak later in the day.
Meanwhile, corporate earnings continued to draw investor attention.
Spotify’s shares soared 10% in premarket trading after the audio-streaming platform forecast first-quarter earnings above expectations, benefiting from strong user growth and price hikes.
Coca-Cola’s shares fell 3.6% after the company missed Wall Street expectations for fourth-quarter revenue.
Onsemi’s shares dropped 5% before the bell, after the chipmaker missed estimates for fourth-quarter revenue.
The AI trade has come under renewed scrutiny, with ballooning capital expenditure projections and concerns over measurable returns weighing on investor sentiment. The next test will be chip giant Nvidia’s results later this month.
Pepperstone’s Chris Weston said that it remained to be seen whether the market was reassessing its positioning in value areas and seeing software as more than a short-term trade, or if it was pushing back into core AI winners.
UBS downgraded the S&P 500 information technology sector to “neutral” from “attractive”.
Software shares have faced the brunt of shifting investor expectations after a sharp selloff last week, fueled by fears of competition from AI tools.
Despite clawing back some losses in the previous two sessions, the S&P 500’s software index has lost 16% so far this year.
In other movers, Upwork shares slumped 26% after the freelance marketplace platform’s first-quarter outlook disappointed.
(Reporting by Twesha Dikshit and Purvi Agarwal in Bengaluru; Editing by Saumyadeb Chakrabarty and Pooja Desai)
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