Markets Brace for Lower Open as Jobs Data, Earnings Loom; AI and Metals Rout Weigh on Sentiment

U.S. stock futures fell Monday, signaling a downbeat start to a week dominated by major corporate earnings and critical jobs data, while a sharp retreat in precious metals and jitters around the high-flying artificial intelligence sector dampened risk appetite.

March S&P 500 E-Mini futures (ESH26) were down 0.57%, while Nasdaq 100 E-Mini futures (NQH26) slid 0.92% in pre-market trading. The weakness followed a broad sell-off in Asia and Europe, where mining and technology shares led declines.

The precious metals rout intensified, with gold and silver prices each down more than 3% after steeper early losses. The slide was exacerbated by increased margin requirements from the CME and followed last week's market shock after former Fed Governor Kevin Warsh was nominated to chair the Federal Reserve. Investors view Warsh as hawkish, a stance that could keep interest rates higher for longer, boosting the dollar and diminishing the appeal of non-yielding assets like bullion.

"The metals meltdown is pulling the rug out from under what was a key hedge for many portfolios," said David Chen, a portfolio manager at Horizon Capital Advisors. "Coupled with the Fed uncertainty, it's forcing a broad reassessment of risk."

AI-related stocks also faced pressure. Oracle (ORCL) dropped over 3% pre-market after unveiling plans to raise up to $50 billion this year to fund cloud expansion, raising concerns over its debt levels. Meanwhile, Nvidia (NVDA) fell about 2% after CEO Jensen Huang clarified that a previously discussed $100 billion investment in OpenAI was "never a commitment," tempering the market's aggressive growth expectations for the sector.

Investors are now pivoting to a heavy docket of economic events and earnings. The week features remarks from several Federal Reserve officials, a new round of corporate results from giants like Amazon (AMZN) and Disney (DIS), and the closely watched January nonfarm payrolls report on Friday. This data will be scrutinized for signs of labor market cooling, a prerequisite for the Fed to consider rate cuts.

However, a brief partial U.S. government shutdown over the weekend has introduced uncertainty about the timely release of some economic data, including the jobs report, though lawmakers expressed confidence it would be resolved quickly.

In Friday's session, Wall Street closed lower, dragged down by plunging chip stocks like KLA Corp. (KLAC) and a collapse in mining shares as metals prices tumbled. On the economic front, stronger-than-expected Producer Price Index data for December reminded markets that inflationary pressures remain persistent.

Comments from Fed officials on Friday reinforced a cautious stance. St. Louis Fed President Alberto Musalem warned against cutting rates too soon, citing the risk of reigniting inflation.

Overseas, European markets steadied after an early drop, with the Euro Stoxx 50 down 0.07%. The European Central Bank and Bank of England are set to make policy decisions later this week. In Asia, China's Shanghai Composite Index plummeted 2.48%—its worst day in nearly 10 months—following disappointing manufacturing data, while Japan's Nikkei 225 fell 1.25%.

Market Voices

Anya Sharma, Chief Strategist at Clearwater Analytics: "This is a healthy consolidation after a massive run. The fundamentals of the economy are still sound, and earnings are growing. The focus this week is on whether the jobs data confirms the 'soft landing' narrative or introduces new doubts."

Marcus Thorne, Independent Trader: "It's pure chaos. The Fed is rudderless, the government can't keep the lights on, and now the last bastion of momentum—AI and tech—is showing cracks. The dumb money chased the rally, and now we're all about to pay for it."

Rebecca Lee, Senior Economist at Franklin & Burke Research: "The market is correctly pricing in a higher-for-longer rate environment. The inflation fight isn't over, and the metals selloff is a symptom of that recalibration. Patience is key."

Ben Carter, Retired Banker and Market Commentator: "The Oracle and Nvidia news is a reality check. The AI story is real, but the valuations assumed infinite, frictionless growth. The need for massive capital raises and clarified commitments shows the path forward is expensive and uncertain."

Today, market participants will parse the U.S. ISM Manufacturing PMI for January for the latest read on factory activity. In the bond market, the yield on the 10-year U.S. Treasury note edged lower to 4.214%.