Futures linked to the main U.S. stock indices inch lower, with markets gearing up for the release of closely-watched -- and delayed -- economic figures. Investors will have the chance to pour through metrics of retail sales and producer prices, among other data points, as Federal Reserve officials debate the trajectory of U.S. interest rates. Google reportedly ratchets up its drive to rival Nvidia in the artificial intelligence chip race, while server provider Dell is due to report its latest earnings.

1. Futures edge lower

U.S. stock futures pointed lower on Tuesday, indicating some investor caution ahead of a crucial batch of fresh economic data this week.

By 02:35 ET (07:35 GMT), the Dow futures contract had ticked down by 42 points, or 0.1%, S&P 500 futures had dipped 7 points, or 0.1%, and Nasdaq 100 futures had declined 46 points, or 0.2%.

The main averages on Wall Street advanced on Monday to begin a trading week due to be shortened by the Thanksgiving holiday.

Underpinning sentiment were comments from Federal Reserve policymakers which bolstered hopes for an interest rate cut at the central bank’s upcoming meeting in December.

Such expectations helped to offset ongoing concerns over a potential artificial intelligence bubble, with fears especially swirling around the sustainability of massive — and increasingly debt-fueled — spending on infrastructure for the nascent technology.

Yet, as analysts at Vital Knowledge argued, this gloomy narrative has displayed signs of “stabilizing.”

“Money isn’t exiting AI but instead shifting,”as cash pours into Google and chipmaker Broadcom to capitalize on the search giant’s new Gemini model and powerful AI-optimized processors, the analysts said.

They added that, against this backdrop, “there’s a bit more comfort in a the prospect of a year-end rally,” although investors are still wary after a recent bout of volatility.

2. Key economic data ahead

Attention now turns to the economic calendar, which is once again replete with consequential figures after the end of a record-long federal government shutdown.

The temporary closure had delayed several of these readings, depriving markets and rate-setters of crucial information needed to take decisions on everything from investments to borrowing costs.

On Tuesday, the slate of data will include gauges of retail sales and producer price growth. Consumer spending remains a crucial cog of the American economy, accounting for more than two-thirds of activity, while inflation has appeared to stay stubbornly elevated.

But, such was the length of the shutdown, the numbers only cover the month of September — and analysts have suggested that the state of the economy may have already changed compared to just two months ago.

3. Fed members on rate outlook

Given this rather murky picture of the wider economy, the Fed faces a difficult choice at its December gathering.

Officials seem to be unusually divided over whether to slash rates for the third straight meeting, or keep borrowing costs steady at their current target range of 3.75% to 4%.

San Francisco Fed President Mary Daly and Fed Governor Christopher Waller both appeared to support the former option in comments on Monday, underlining a desire to prioritize support for a weakening labor market over sticky price gains. Wagers on a 25-basis point rate reduction next month have subsequently risen.

However, other Fed members have highlighted some reticence to cut in an environment where the central bank does not have the latest economic data. At the same time, some have expressed wariness about the path ahead for rates beyond December.

According to the Wall Street Journal, the final call will ultimately fall to Fed Chair Jerome Powell — but either choice will come with significant drawbacks and risks.

4. Meta, Google discuss TPU deal - The Information

Google is sharply escalating its bid to rival Nvidia in the AI chip race, and Meta Platforms is emerging as a potential multibillion-dollar customer, The Information reported Monday evening.

For years, Google has limited its custom tensor processing units (TPUs) to its own cloud data centers, renting them out to companies running large-scale AI workloads. But according to The Information, Google is now pitching the chips for deployment inside customers’ own data centers, marking a major shift in strategy.

One of those customers is Meta, the owner of Facebook and Instagram. The firm is reportedly in discussions to spend billions of dollars to integrate Google’s TPUs into its data centers starting in 2027, while also planning to rent TPU capacity from Google Cloud as early as next year. Meta currently relies primarily on Nvidia GPUs for its AI infrastructure.

Shares of Google-parent Alphabet were higher in premarket U.S. trading on Tuesday, while Nvidia dropped by a little over 2%.

5. Dell to report

More corporate earnings are also due out today, as the latest quarterly reporting period ebbs to a close.

Dell Technologies will headline the slew of results after the bell on Wall Street. The company, whose customers including groups like CoreWeave and Elon Musk’s AI startup xAI, almost doubled its annual profit growth target for the next four years in October, underscoring its big bet on surging demand for its servers which help power AI models.

Annual growth in adjusted per-share profit is now tipped to be at least 15%, up from roughly 8% previously. Revenue, on an annualized basis, is seen increasing at between 7% and 9% during the period, versus a prior projection of 3% to 4%.

Soaring expenditures on Dell’s servers have cemented its position as one of the major beneficiaries of the AI boom, although analysts have flagged worries that heavy competition and the high costs related to building these products could dent income margins.