US pre-open: Futures dip as investors take profits after recent gains

(Sharecast News) - US stock futures were pointing to a mild pullback on Tuesday after easing shutdown fears sparked a rally across global equity markets the previous session. By 0518 in New York, the S&P 500 was trading down 0.2%, the Nasdaq was 0.4% lower while the Dow was more or less flat.



Investors were taking a breather following Monday's huge gains - the S&P 500 and Nasdaq surged 1.5% and 2.3% respectively - on the back of hopes that the longest government shutdown in American history could soon come to an end.

On Sunday, the Senate took a vote on a deal to end the shutdown, with Republicans marginally clearing the minimum threshold required with the support of eight votes from Democrat defectors.

Late on Monday, the Senate then passed the spending bill, which will fund the government until the end of January. The package now moves to the GOP-controlled House of Representatives for a final vote, before Donald Trump is expected to sign it into effect - which could see public-sector workers return to their roles as early as Friday.

"The boost seen yesterday around the potential for an end to the US shutdown appears to be losing legs already," said Joshua Mahony, chief market analyst at Scope Markets. "Although the fact that this historic event failed to negatively impact market sentiment over much of that 40-day period means that the boost from a resolution should similarly be short-lived."

Tech stocks in particular rallied on Monday, rebounding after concerns of stretched valuations in the AI and chip sectors led to a sell-off last week.

Nvidia, which jumped nearly 6%, was trading 1.5% lower in pre-market deals on the back of the news that SoftbBank has sold a stake in the chip designer for $5.83bn - a move that could spark renewed fears about lofty valuations across the semiconductor sector.

"One of the world's biggest tech investors selling out of Nvidia is a major event for markets. People are looking for clues that the tech rally is close to the top, and SoftBank's profit-taking in the chip giant is significant," said AJ Bell investment director Russ Mould.

Elsewhere, Nvidia's Magnificent Seven peers - Alphabet, Amazon, Apple, Tesla, Meta Platforms and Microsoft - were also tracking lower ahead of the opening bell.