US Futures Slip as Tech Jitters and Shutdown Endgame Collide

Futures drift lower as relief trade stalls

US futures slip as tech jitters and the shutdown endgame collide, with investors unwilling to extend Monday’s relief rally despite progress toward reopening the federal government. In early Tuesday dealing, S&P 500 and Nasdaq futures traded slightly in the red while Dow futures were flat, reflecting a market caught between optimism over a Senate-backed funding bill and concern that stretched technology and AI valuations remain vulnerable. Cash trading later saw the S&P 500 and Nasdaq close lower, even as the Dow eked out small gains on support from defensives and select blue chips.

AI leaders under pressure again

The weight on futures came largely from the same names that had powered indices higher for much of 2025. Nvidia fell after news that Japan’s SoftBank had exited its remaining stake, a move traders read as a signal that some early backers see limited upside at current levels. Nvidia-backed CoreWeave slumped in double digits after cutting its revenue outlook, sharpening questions about whether all parts of the AI ecosystem can justify aggressive capacity and capex plans. The combination revived unease that parts of the AI trade have run ahead of fundamentals and that US futures slip whenever sentiment around these bellwethers wobbles.

Valuation nerves cap the rebound

The setback highlights how sensitive Wall Street remains to valuation headlines. After a powerful multi-quarter run, leading US technology and AI stocks trade at earnings multiples that assume robust growth through 2026 and minimal policy or competitive shocks. Tuesday’s price action suggested limited appetite to buy dips without clearer confirmation that profit trajectories match the rhetoric. Portfolio managers are increasingly focused on differentiating between cash-generating franchises and stories dependent on optimistic long-term assumptions, a shift that leaves index futures exposed when high-profile names disappoint or major shareholders lock in gains.

Shutdown deal optimism meets execution risk

Progress in Washington should, in theory, have offered firmer support. The Senate’s 60-40 vote to advance a compromise to end the record shutdown has boosted expectations that federal agencies will soon reopen, with back pay for workers and delayed economic data finally released. Markets welcomed the step, but the shutdown endgame still hinges on swift House passage and presidential sign-off. Until the process is complete, traders remain wary of baking in the full economic and sentiment benefit, particularly after weeks in which political brinkmanship repeatedly surprised forecasts.

Data vacuum and soft private jobs signals

The shutdown has starved investors and the Federal Reserve of key official indicators, pushing more weight onto private surveys. Fresh figures from ADP and other sources have pointed to job losses or weaker hiring in pockets of the private sector, reinforcing a narrative of a cooling, not collapsing, US economy. The absence of comprehensive federal releases has amplified uncertainty over how quickly growth is slowing and whether inflation is behaving as expected. With the Fed’s next move heavily data-dependent, that uncertainty feeds directly into equity risk premia and keeps US futures subdued.

Rotation cushions the downside

Beneath the headline weakness in tech, market breadth has been more balanced. Financials, energy names linked to disciplined capital returns, and select industrials attracted inflows as investors rotated toward sectors with more moderate valuations and clearer near-term earnings visibility. Some domestic cyclicals and value stocks, which lagged during the AI-led surge, saw interest from managers looking to rebalance exposures without exiting equities altogether. That rotation helped the Dow hold firmer than the Nasdaq and limited the scale of index declines despite pressure in the largest growth names.

Earnings and guidance back in focus

With the shutdown resolution in sight, attention is pivoting back to micro drivers. Companies tethered to AI infrastructure and cloud services face a higher bar as investors demand evidence that heavy investment translates into durable returns. Disappointments like CoreWeave’s guidance cut are being treated as warning signs for segments that priced perfection. At the same time, positive corporate stories, such as stronger results at established industrial and energy groups, show that not all earnings momentum hinges on a small cluster of tech leaders. The futures slip reflects this tug of war between concentrated fragility and broader resilience.

Policy outlook: cautious support, not a safety net

Rate expectations are adding nuance instead of clarity. Markets still lean toward another Fed cut, but officials have signaled they want a clearer read on growth and inflation once regular data resumes. Yields remain off their peaks, which offers some relief for long-duration assets, yet there is no blanket assurance of aggressive easing that would automatically underwrite risk. Against that backdrop, calls for the S&P 500 to move significantly higher rely on earnings delivery rather than multiple expansion, leaving futures vulnerable on days when profit or policy narratives wobble.

What investors are watching next

From here, traders are focused on three immediate triggers. First, confirmation that the shutdown deal clears the House and is signed without disruptive amendments. Second, the release and quality of delayed economic data, especially labour and inflation prints that will shape the Fed’s tone. Third, incoming guidance and order-book commentary from key AI, semiconductor and cloud companies that have driven 2025’s gains. Any combination of clean political resolution, reassuring macro data and solid tech earnings could stabilise sentiment; renewed gridlock, weak numbers or further AI disappointments would validate the caution embedded in Tuesday’s futures trade.

Bottom line

US futures slip as tech jitters and the shutdown endgame collide, signalling a market that is relieved by progress in Washington but unwilling to chase risk while AI valuations, patchy private data and policy uncertainty remain unresolved. Until earnings and confirmed reopening deliver stronger proof points, investors are likely to stay selective, favouring balance sheet strength and valuation discipline over momentum alone.