- US stock futures slid on Tuesday after Nvidia unveiled a new AI chip called Blackwell on Monday.
- Investors weren't blown away, sending Nvidia shares down as much as 1.7% in premarket trading.
- Wall Street was looking forward to fresh guidance on interest rates from the Fed on Wednesday.
US stocks were set to open lower on Tuesday as investors gave a muted reception to Nvidia's new AI microchip, and anxiously awaited the Federal Reserve's policy meeting on Wednesday for guidance on the trajectory of interest rates this year.
Futures underlying the S&P 500, Nasdaq 100, and Dow Jones Industrial Average were down about 0.2% shortly after 6 a.m. ET. The key 10-year Treasury yield was almost flat at 4.325%, while the US Dollar Index rose 0.5% to about 104 points.
Nvidia shares slid as much as 1.7% in premarket trading to $869 after CEO Jensen Huang unveiled its next-generation graphics processing unit (GPU) called Blackwell.
The stock is up roughly 80% this year, and has more than tripled in value over the past 12 months to become the world's third-most valuable public company with a $2.2 trillion market capitalization.
"This new chip could ultimately supercharge the AI revolution and could bring it closer to having a real-world impact," Kathleen Brooks, research director at XTB , said in a morning note.
She suggested the market's muted reaction might reflect the significant complexity of producing the microchip — which could result in production delays and slower adoption — and the prospect of stricter regulation if Blackwell does become integral to the AI revolution.
Meanwhile, the Bank of Japan raised interest rates for the first time in 17 years, making Japan the last country to end negative rates as deflation has become less of a concern for its central bank.
The Fed is set to keep interest rates steady on Wednesday, but investors will look for the "dot plot" showing how many cuts its members expect this year.
"No change is expected, and markets have already reassessed the timeline of interest rate cuts, with a reduction not expected until June," Susannah Streeter of Hargreaves Lansdown said in a morning note.
"But with price rises still steamier than expected, signs of a more watchful wary Fed are likely to emerge from this meeting."
Earnings on deck include Tencent, Xpeng, and Smith Douglas Homes. Highlights of the economic calendar include figures for housing starts and building permits in February, and later this week, data on unemployment, manufacturing, and leading economic indicators.