Stock futures jump ahead of a monster week after a $5 trillion AI rout

Stock futures experienced an uptick on Sunday evening as investors on Wall Street brace for an eventful week, highlighted by Apple’s earnings announcement, the upcoming midterm elections, and fluctuations in oil prices reaching $100 per barrel.

Futures for the S&P 500, Nasdaq 100, and Dow Jones Industrial Average all showed gains, with the tech-focused Nasdaq taking the lead following a significant selloff in the artificial intelligence sector last week.

The selloff that concluded October was severe but targeted. Major companies within the AI and semiconductor industries have seen a staggering loss of approximately $5 trillion in market capitalization since October 6, according to calculations from Yahoo Finance. In contrast, the remaining 625 large U.S. stocks increased in value by about $1.3 trillion during the same period.

Last week underscored this trend, as the S&P 500 fell by about 0.6%. Despite this decline, nine out of its eleven sectors managed to gain at least 1% or more. Notably, this marked a unique downturn for the index; no other week of decline since at least 1999 has recorded more than seven sectors rising concurrently, based on Yahoo Finance's analysis.

The future trajectory of the market remains uncertain. Historical data suggests that the current tech downturn could worsen before stabilizing. Conversely, some analysts believe the market may enter a favorable phase, as historically, the S&P 500 has consistently risen from the end of midterm October through the following June since 1950. Both scenarios may coexist, given that the recent selloff has demonstrated that other sectors can thrive while technology struggles.

Looking ahead, Apple is set to announce its earnings after the market closes on Monday, with particular attention on the sales performance of the iPhone 18. As the most valuable company globally, Apple’s market capitalization stood at approximately $5.03 trillion at the close of trading on Friday, surpassing Nvidia, which is valued at about $4.93 trillion. Apple is the only stock among the so-called "Magnificent Seven" that has outperformed the S&P 500 this year, enjoying a rise of about 27% compared to the index’s increase of roughly 11%. Additionally, Palantir is also scheduled to report its earnings on Monday.

In the oil market, West Texas Intermediate crude opened lower on Sunday after closing above $104 per barrel on Friday, marking its highest closing price since mid-September. The ongoing conflict in Iran has effectively shut down the Strait of Hormuz for nine months, and OPEC+ decided to maintain its output targets for December during a meeting on Sunday.

As for the political landscape, voters will head to the polls on Tuesday for the midterm elections, while the October jobs report is expected to be released on Friday. Wall Street is currently engaged in discussions about the potential implications of these events on Federal Reserve policies.

This summary was informed by internal AI tools that assisted in analyzing interview transcripts and conducting research, while human editors reviewed and verified the content before publication.

Jared Blikre serves as the global markets and data editor for Yahoo Finance. You can follow him on X at @SPYJared or reach out via email at jaredblikre@yahooinc.com.