Investing.com - US stock futures dropped slightly on Tuesday following a jump in the S&P 500 and Nasdaq Composite to begin the trading week. US President-elect Donald Trump denies a report that his team is exploring potentially scaling back plans for sweeping new tariffs. Elsewhere, Nvidia (NASDAQ:NVDA) CEO Jensen Huang unveils a new line of the semiconductor titan's artificial intelligence-enhanced gaming chips.
1. Futures edge lower
US stock futures hovered below the flatline on Tuesday after the S&P 500 and Nasdaq Composite touched a more than one-week high in the previous session.
By 03:28 ET (08:28 GMT), the S&P 500 futures contract had dipped by 5 points or 0.1% and Nasdaq 100 futures had fallen by 27 points or 0.1%, and Dow futures had retreated by 31 points or 0.1%.
The 30-stock Dow Jones Industrial Average dropped to kick off the trading week, although the benchmark S&P 500 and tech-heavy Nasdaq Composite both advanced. Stocks had moved higher on Friday, bouncing back from a somewhat downbeat end to 2024 and start to the new year that was fueled by worries over frothy valuations, elevated US Treasury yields, and thin liquidity.
On Monday, tech giant Microsoft (NASDAQ:MSFT) announced it is aiming to invest $80 billion in artificial intelligence-enabled data centers, boosting chipmakers. Meanwhile, Foxconn -- the world's biggest contract electronics manufacturer -- unveiled fourth-quarter revenue that topped estimates.
Shares in large semiconductor names like Nvidia and Advanced Micro Devices (NASDAQ:AMD) jumped by more than 3%, and peer Micron Technology (NASDAQ:MU) surged by over 10%. The sector-wide Philadelphia Semiconductor index increased by 2.84%.
2. Trump denies report of possible plan to pare back tariffs
US President-elect Donald Trump has rebuffed a Washington Post (NYSE:POST) report that his team is eyeing plans to scale back the scope of his sweeping tariff proposals.
Citing unnamed sources familiar with the matter, the paper had earlier reported that the incoming US leader's aides are exploring a potentially narrower approach to the levies. The tariffs would be applied to all countries, although they would focus in on specific critical sectors, the WaPo report said, marking a softening to the stricter approach Trump had supported during the 2024 presidential campaign.
The report gave added lift to stocks on Wall Street, particularly for automakers such as Ford (NYSE:F) and General Motors (NYSE:GM).
However, Trump later took to his Truth Social platform to deny the report, saying it "incorrectly states that my tariff policy will be pared back."
3. Nvidia's Huang unveils new AI-enhanced RTX (NYSE:RTX) chips
Nvidia CEO Jensen Huang has unveiled the company’s latest line of RTX graphics processing units, and reiterated that its Blackwell artificial intelligence servers were now in full production.
Speaking at the annual CES tech conference in Las Vegas, Huang said the new gaming chips -- dubbed the RTX 50 series -- will boast at least twice the performance of their predecessors, the 40 series, and use AI to improve their graphics processing abilities.
The head of the world's second-most valuable company also announced what it has called Cosmos foundation models, which generate hyper-realistic video to help train robots and self-driving cars at a cheaper cost when compared to using conventional data.
Huang also noted that Nvidia's next generation Blackwell AI chips were in full production, echoing comments made to investors late last year. The Blackwell line is expected to underscore Nvidia's newest wave of earnings growth, as major technology firms ramp up capital spending on data center infrastructure to power their AI development.
4. US services sector activity data ahead
Activity in the key US services sector is tipped to have picked up the pace in December after slowing in the prior month.
Economists predict that the Institute for Supply Management's closely-watched non-manufacturing purchasing managers' index rose to 53.5 in December, up from 52.1 in November.
A reading above 50 denotes expansion in the services industry, which accounts for more than two-thirds of the world's biggest economy. The ISM has said any level above 49 generally indicates growth in the overall economy.
The number will also serve as a measure of the state of the economy at both the end of the fourth quarter and as the incoming Trump administration comes to power later this month. In November, the ISM survey showed that many businesses were concerned that Trump's plans for sweeping import tariffs could lead to higher prices.
Elsewhere on Tuesday, the Job Openings and Labor Turnover Survey for November is due to be released. The data, a proxy for labor demand, is set to act as a precursor to the all-important US employment report on Friday.
5. Oil slips
Oil prices fell Tuesday, continuing to hand back the gains generated last week on optimism of more policy support to revive economic growth in China, the world’s largest crude importer.
By 03:29 ET, the US crude futures (WTI) dropped 0.3% to $73.30 a barrel, while the Brent contract fell 0.3% to $76.08 a barrel.
Both benchmarks slid on Monday, after rising for five days in a row last week. They settled at their highest levels since October on Friday.
However, losses are likely to be limited given ongoing concerns over tightening Russian and Iranian supply.
(Reuters contributed reporting.)