A trader works on the floor of the New York Stock Exchange (NYSE) during morning trading on March 4, 2024 in New York City.
Angela Weiss | Afp | Getty Images
U.S. stock futures ticked lower Tuesday after the Nasdaq Composite retreated from its record high.
Futures tied to the Dow Jones Industrial Average dropped 77 points, or 0.2%. S&P 500 futures inched down 0.2%, while Nasdaq-100 futures fell roughly 0.4%.
In after-hours action, shares of GitLab tumbled more than 20% after the software company posted a weak forecast for the full year.
During Monday’s main trading session, the S&P 500 dropped 0.12%, and the tech-forward Nasdaq Composite slipped 0.41%. This came on the back of the two indexes’ record closing highs on Friday. The Dow also slipped nearly 98 points, or 0.25%.
Chipmakers Nvidia and Super Micro Computer continued their run, gaining more than 3% and 18%, respectively. Meanwhile, other mega cap tech names struggled and pulled the market lower. Apple lost 2.5% after the European Commission fined the company nearly $2 billion. Tesla, which fell more than 7% following new price discounts, led the broad market index’s losses.
Overall, large cap tech companies are still the best way to play the artificial intelligence trend, Jason Draho, UBS Global Wealth Management head of asset allocation Americas, told CNBC’s “Closing Bell: Overtime” on Monday. “They’re still the ones that have the scale to kind of benefit. Their valuations are extreme but they’re also growing incredibly fast.”
Draho said although there are fears of “pent-up exuberance” in the market similar to 1996, he thinks there’s still more upside potential ahead.
“But this market is still more [in the] early to mid 90s, not late the 90s. We don’t see that exuberance yet. And I think some of these large tech companies are still going to benefit from this AI sphere, which we think has a multi-year horizon,” Draho added.
On the earnings front, investors will be looking toward reports from retailer Target on Tuesday morning, followed by Nordstrom and Box after the bell.
More economic data, including the S&P Global US Services purchasing managers’ index, durable goods orders and ISM Services Index are scheduled for release Tuesday morning.