US stock index futures edged higher Tuesday, with the tech sector bouncing back to a degree after he previous session's rout sparked by Chinese AI startup DeepSeek, while the Federal Reserve starts its latest policy-setting meeting.
At 06:10 ET (11:10 GMT), Dow Jones Futures inched 30 points, or 0.1%, higher, S&P 500 Futures gained 25 points, or 0.4%, and Nasdaq 100 Futures gained 145 points, or 0.7%.
The tech-influenced Wall Street indices closed sharply lower on Monday, after DeepSeek unveiled advancements in AI technology that could disrupt the market, prompted fears of heightened competition and potential market share erosion to the US-based chipmakers.
The NASDAQ Composite declined 3.1%, its worst single-day showing in more than a month, and the benchmark S&P 500 fell 1.5%, while the Dow Jones Industrial Average rose 0.7%.
AI-linked stocks rebound
The tech sector has rebounded Tuesday, with AI chip leader Nvidia (NASDAQ:NVDA) rising 5% in premarket trading, a day after $593 billion was wiped off its market value in the biggest single-session loss for any company.
Other AI-linked stocks also regained some ground, with Oracle (NYSE:ORCL) and Broadcom (NASDAQ:AVGO) also climbing strongly.
Aside from the tech sector, company earnings are likely to take center stage this week.
Boeing (NYSE:BA), General Motors (NYSE:GM) and Lockheed Martin (NYSE:LMT) are among the companies due to report quarterly results later in the day, while "Magnificent 7" members Microsoft (NASDAQ:MSFT), Facebook-parent Meta Platforms (NASDAQ:META), Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA) are due later this week.
Investors await Fed meeting
Focus this week was squarely on the Federal Reserve's upcoming two-day policy meeting, due to start later in the session.
The Fed is widely expected to keep borrowing costs unchanged at the end of its meeting on Wednesday, following a string of reductions late last year that left the all-important benchmark rate at a range of 4.25% to 4.50%.
Fed’s preferred gauge of inflation - PCE price index data, and advance GDP estimates for the fourth quarter are also due this week.
Crude edges higher
Oil prices edged higher Tuesday, but remained close to two-week lows on the back of concerns over increased supplies under President Donald Trump, as well as doubts over long-term demand, particularly from China.
By 06:10 ET, the US crude futures (WTI) climbed 0.6% to $73.60 a barrel, while the Brent contract rose 0.6% to $76.61 a barrel.
Oil prices have slumped some 5% in the past week, weighed by Trump declaring a national energy emergency in order to ramp up US production, while calling on the Organization of Petroleum Exporting Countries to increase production.
Markets were also on edge over the president’s plans to impose trade tariffs on major economies, especially China.
China, the world's largest importer of crude oil, reported on Monday an unexpected contraction in manufacturing activity in January, adding to concerns over global crude demand growth.
