Nasdaq 100: Nvidia Weakness Weighs on Tech Stocks as Valuation Risks Mount

Nasdaq Pauses After Record Run as Nvidia-Led Rally Faces Valuation Scrutiny

Stock futures were little changed Tuesday morning, pausing after Wall Street posted fresh all-time highs in the prior session. Nasdaq-100 futures hovered near flat, while the S&P 500 and Dow futures each ticked up just 0.1%. Traders are weighing whether Nvidia’s massive AI-driven surge can keep powering equity markets higher, with concerns around stretched valuations beginning to surface.

Can Nvidia Sustain the AI Momentum After a $100 Billion OpenAI Deal?

Nvidia surged nearly 4% Monday after announcing it will invest up to $100 billion in OpenAI to build advanced data centers powered by its AI chips. The partnership, finalized just hours before OpenAI CEO Sam Altman unveiled new infrastructure plans, marks a deepening alignment between two of AI’s most influential players.

Jensen Huang, Nvidia’s CEO, said the deal would require 4–5 million GPUs, doubling current production. Nvidia’s market cap jumped $170 billion following the news, now nearing $4.5 trillion.

Despite the bullish reaction, Nvidia dipped nearly 1.48% in Tuesday’s early trade, suggesting traders may be questioning whether the upside is fully priced in. Microsoft, Oracle, and SoftBank also remain intertwined in OpenAI’s broader buildout under the Stargate initiative, which adds further complexity to Nvidia’s position.

Are Market Multiples Getting Too Rich to Ignore?

Vanguard’s chief economist Joe Davis warned that while AI and the Fed’s recent rate cut are lifting markets, the underlying fundamentals are only “okay.” With the S&P 500 and Nasdaq setting new highs, Davis said any earnings misses or inflation surprises could expose cracks. Nvidia’s valuation, alongside other mega-cap tech names, leaves limited room for error.

The next key data point is Friday’s core PCE price index, the Federal Reserve’s preferred inflation gauge. A cooler print could reinforce expectations for further rate cuts, while a hot number may force investors to reassess their bullish positioning.

Which Stocks Are Moving Pre-Market and Why?

Several stocks are seeing early action. Firefly Aerospace dropped over 10% after posting a wider-than-expected loss in its first quarterly report. AutoZone fell 2% on weaker margins despite a same-store sales gain. Kenvue rebounded over 4%, clawing back losses tied to unproven autism claims linked to Tylenol. Meanwhile, Boeing rose 2% on reports of a potential large aircraft deal with China, and Micron is up ahead of its earnings release Tuesday afternoon.

Market Forecast: Watch for AI Consolidation and Inflation Cues

Equities may continue to consolidate near highs as traders look for confirmation that Nvidia’s AI catalyst can translate into broader earnings growth. Friday’s PCE reading will be critical; a soft number could re-energize tech. However, with major indexes priced for perfection, any hint of disappointing data or earnings could spark sharp pullbacks. Watch Nvidia’s support near $174 and upside pressure toward $185 for near-term direction cues in the Nasdaq.

More Information in our Economic Calendar.