S&P500: Premarket Moves Flat as Shutdown Risk and Jobs Forecast Take Center Stage

Stock Futures Rise as Traders Eye AI Rebound, Government Shutdown Risk

U.S. stock futures climbed Monday as Wall Street attempted to recover from last week’s AI-led pullback. The S&P 500, Nasdaq, and Dow were set to open higher after their weakest performance since early August. The move comes as traders weigh renewed optimism in AI-linked names against the looming threat of a U.S. government shutdown and uncertainty around Friday’s nonfarm payrolls report.

The Cboe Volatility Index (VIX) remained below 16, indicating limited fear in the market. Despite concerns around Fed policy and fiscal standoffs, investor sentiment stayed resilient. Analysts say expectations for Fed rate cuts and optimism around AI monetization continue to support valuations.

Can AI Stocks Like Nvidia and Oracle Regain Momentum?

Nvidia rose 1.1% in premarket trading, adding to Friday’s modest gain after a tough week in which the stock fell 3%. The chipmaker’s recent deals with OpenAI, Microsoft, and Alibaba are renewing investor confidence. Oracle also advanced 0.9% after sliding last week. Both names are being closely watched to gauge the sustainability of the AI boom, which is a key pillar of this year’s market rally.

Still, some analysts, including Wedbush’s Seth Basham, warn that speculative behavior is creeping in. He cites the recent surge in high short-interest and momentum names as signs of frothy trading that could reverse sharply if sentiment cools.

Is the Fed’s Pivot Fueling Risky Bets?

The Federal Reserve’s pivot toward rate cuts has emboldened traders to take on more risk, according to Basham. Credit spreads remain tight and volatility is low, even as economic uncertainty rises. That’s led to a rush into high beta plays and sectors like semiconductors and biotech. However, history shows these kinds of risk-on surges often end abruptly.

Meanwhile, signs of economic resilience continue to build. August new-home sales jumped 20%, aided by falling mortgage rates. Consumer activity may also get a lift from new tax relief measures, which could significantly boost refunds starting early next year.

Which Stocks Are On the Move Pre-Market?

Merus surged 38% after Genmab announced an $8 billion cash acquisition of the Dutch biotech firm. Occidental Petroleum added 1.1% on reports it may sell its OxyChem division for $10 billion. Lam Research rose 2.8% after Deutsche Bank upgraded the stock. On the downside, Intel slipped 1.3% and EA was halted following news of its $55 billion go-private deal, the largest LBO on record.

Tesla gained 0.7% ahead of Q3 delivery numbers, with expectations at 447,000 units. Carnival rose 1.1% ahead of earnings, while Oracle and Nvidia continued rebounding from last week’s AI dip.

What’s the Market Outlook as Shutdown, Jobs Report Loom?

Traders are closely watching Washington, where a government shutdown could begin Tuesday night. A disruption may delay Friday’s jobs report — a key input for Fed decision-making. Wall Street is hoping for a “goldilocks” number: strong enough to ease recession fears, but not so hot as to revive hawkish Fed talk.

Despite last week’s losses, the S&P 500 is up 2.8% for the month, with the Nasdaq up 2.9% and the Dow 1.5%. Near-term market direction will hinge on AI sentiment, fiscal headlines, and the labor market print.

More Information in our Economic Calendar.