U.S. stock futures were little changed on Tuesday as a record-setting rally on Wall Street paused, with investors’ attention locked on an upcoming speech from Federal Reserve Chair Jerome Powell for clues on the future path of interest rates.
The market calm follows a powerful tech-driven surge that propelled major indexes to their third consecutive record close on Monday. The rally was fueled by a monumental $100 billion artificial intelligence (AI) partnership between chipmaker Nvidia and OpenAI, alongside renewed optimism for a landmark Boeing aircraft deal with China. Meanwhile, gold prices climbed to a fresh all-time high, reflecting ongoing demand for safe-haven assets amid expectations of further rate cuts.
💡 At a Glance: Key Market Movers
- Fed in Focus: All eyes are on Fed Chair Jerome Powell’s first speech since last week’s rate cut for signals on the central bank’s next moves.
- AI Bonanza: Nvidia’s historic $100 billion bet on OpenAI solidified its central role in the AI boom, prompting analysts to raise price targets.
- Trade Diplomacy: Boeing shares gained on reports of a potential 500-aircraft deal with China, a significant breakthrough after years of trade tensions.
- Gold’s Rally: Spot gold hit a record high above $3,780 per ounce, supported by rate-cut expectations and strong institutional demand.
Investors Await Powell’s Guidance on Rate-Cut Path
The focal point for the day is a speech by Fed Chair Jerome Powell, his first since the Federal Reserve cut interest rates last week for the first time in 2025. His remarks are crucial for shaping market expectations, as traders currently see a high probability of two more quarter-point cuts this year.
Powell’s task is complicated by a public split among Fed officials. While new Fed Governor Stephen Miran argued on Monday for more aggressive cuts to avoid harming the labor market, other officials, including Atlanta Fed President Raphael Bostic, have urged caution, citing concerns that inflation remains elevated. This mixed messaging has created uncertainty, making Powell’s words even more significant for market direction.
Tech Sector Fueled by Unprecedented AI Bet
The Nasdaq’s recent gains have been heavily supported by excitement in the tech sector, culminating in Monday’s announcement of a strategic partnership between Nvidia (NVDA) and OpenAI. The AI chip leader plans to invest up to $100 billion in OpenAI to build and deploy massive AI data centers powered by Nvidia’s systems.
The deal was met with immediate optimism from Wall Street analysts. Barclays analyst Thomas O’Malley raised his price target on Nvidia, calling the agreement a “compute bonanza.” Similarly, Evercore ISI analyst Mark Lipacis reiterated Nvidia as a “Top Pick,” stating the company is “uniquely positioned” to support OpenAI’s expansion. Despite a slight premarket dip of 0.7%, Nvidia’s stock had hit an intraday record high the previous session.
Boeing Nears Landmark Deal in Signal of Thawing US-China Ties
In a significant development for international trade, Boeing (BA) saw its shares rise over 2% in premarket trading on signs that a massive aircraft order from China is nearing finalization. The deal, which could involve up to 500 aircraft, is being seen as a potential centerpiece of a broader trade agreement between the U.S. and China.
The agreement, if completed, would mark a major breakthrough for Boeing, ending a sales drought that has persisted since 2017. The news also suggests a potential easing of trade tensions under the current administration, with U.S. Ambassador to China David Perdue describing it as a “huge order”.
Gold Hits Fresh Record as Investors Seek Safety
Gold prices continued their spectacular run, touching a fresh record high of $3,790.82 per ounce. The rally is largely driven by the prospect of lower U.S. interest rates, which reduce the opportunity cost of holding non-yielding bullion. Increased institutional investment, strong demand from India during its festive season, and a rebound in Chinese buying are also contributing factors.
Analyst Ross Norman noted that Miran’s “dovish posture” at the Fed has heightened expectations for further cuts, creating a “gold-positive outcome.” Holdings of the SPDR Gold Trust, the world’s largest gold-backed ETF, rose to a more than three-year high, confirming the strong investor appetite.
What to Watch Next
Later today, investors will also parse the September reading of S&P Global’s flash manufacturing PMI for the latest economic signals. Comments from other Fed officials, including Governor Michelle Bowman and Atlanta Fed President Raphael Bostic, will also be scrutinized for any additional hints on monetary policy.
The market’s resilience in September, a historically weak month for stocks, will be tested by the interplay of these powerful forces: the Fed’s delicate balancing act, the relentless AI investment cycle, and evolving global trade relationships.
