Dow, Nasdaq, S&P futures edge higher after Dow’s sharp drop, investors await Nvidia earnings and economic data

Market Overview - US stock markets experienced a broad decline on Monday, with the Dow Jones Industrial Average falling approximately 1.18%, the S&P 500 down 0.92%, and Nasdaq retreating roughly 0.84% [7] - Futures tied to the Dow rose about 52 points (0.17%), S&P 500 gained approximately 0.22%, and Nasdaq 100 futures were up 0.31%, indicating cautious optimism ahead of significant corporate earnings and economic reports [7] Key Catalysts - Nvidia's upcoming third-quarter earnings report is a major catalyst for futures traders, with strong results potentially boosting AI sector sentiment and lifting futures, while signs of demand slowdown could pressure markets [5][7] - Economic data releases, including a significant jobs report, are expected to influence trading sentiment and provide clarity on consumer resilience [7][8] Federal Reserve Insights - Current futures imply a 39-45% chance of a December rate cut, a decrease from nearly 70% earlier in the fall, reflecting tempered market expectations [6][7] - Upcoming economic reports, including jobs data and Fed meeting minutes, are anticipated to amplify market moves depending on their alignment with economic expectations [6][7] Sector Performance - There is investor caution in tech sectors due to concerns about stretched valuations, particularly in AI-related stocks [8] - Defensive sectors are showing relative strength amid worries about economic growth and inflation dynamics [8]