FX.co ★ US Futures Stabilize After Sharp Selloff

US stock futures showed stability on Friday after significant declines in the major indices during the previous session. This comes as the positive impact of the US government reopening was overshadowed by ongoing concerns regarding overestimated AI valuations and the Federal Reserve's uncertain interest rate path. On Thursday, the Dow Jones Industrial Average dropped by 1.65%, the S&P 500 decreased by 1.66%, and the Nasdaq Composite fell by 2.29%, marking the worst performance for all three indices since the selloff on October 10. High-profile technology stocks were at the forefront of the downturn, with companies like Tesla, Nvidia, AMD, Palantir, Broadcom, and Oracle experiencing losses ranging from 3.6% to 6.6%. Investors are exercising caution due to a sharp increase in debt financing and rising AI capital expenditures. Additionally, market expectations for a 25 basis point rate cut in December have diminished to around 50%, down from nearly 95% a month ago, as several Federal Reserve officials have expressed caution about further monetary easing amid ongoing inflation and gaps in official data due to the recent government shutdown.