Tech Stocks Surge Amid AI Chip Collaboration Hopes

U.S. stock index futures fell after a tech rally, as investors await economic data and earnings reports. Alphabet's shares rose following news of a collaboration with Meta on AI chips. Broadcom gained, while Nvidia and AMD fell. The Federal Reserve's actions and retailer earnings also impacted market trends.

U.S. stock index futures dipped on Tuesday following a tech-fueled rally in equities, as investors eagerly await economic data and earnings reports that may unveil further insights into the strength of the American consumer. Notably, gaining against the broader trend, Alphabet rose 4% in premarket trading. This came after reports surfaced indicating that Meta Platforms, the parent company of Facebook, is in talks with Alphabet to utilize Google's AI chips in its data centers by 2027 and to rent chips from Google Cloud by next year.

In another significant movement, Broadcom, which assists Alphabet in manufacturing its AI chips, saw an increase of 2.5%. However, dominant players in the AI chip sector, Nvidia and Advanced Micro Devices, experienced a decline of nearly 4% each. Meanwhile, shares of Alphabet have surged by almost 70% this year, surpassing other mega-cap companies and edging closer to a $4 trillion market capitalization.

Investors will keep an eye on September's retail sales data and the Conference Board's November consumer confidence report later in the day. These reports may provide crucial insights into the state of the American consumer at a time when tariff-driven price pressures and layoffs have caught attention. Moreover, a crucial inflation report is scheduled for release, focusing on components tied to the Fed's preferred inflation measure—the Personal Consumption Expenditures Index. With the holiday shopping season upon us, consumer spending patterns will be closely monitored.

(With inputs from agencies.)