New York City, NY — Stock futures showed minimal movement Tuesday morning, even as shares of Nvidia surged following a significant deal approved by President Donald Trump for the sale of H200 chips to China. This agreement is poised to benefit the U.S. government financially, as a portion of the sales proceeds will be allocated to federal coffers.

Futures linked to the Dow Jones Industrial Average remained just above the flatline, while both S&P 500 and Nasdaq 100 futures reported slight gains of less than 0.1 percent. In after-hours trading, Nvidia’s stock rose more than 2 percent after Trump announced on social media that the company could begin shipping its chips to approved clients in China, contingent upon the U.S. receiving a substantial cut of the profits. Nvidia’s CEO, Jensen Huang, had discussions with Trump last week regarding this deal, marking a significant development for the tech sector after extensive negotiations.

Tech stocks performed notably well during Monday’s trading session, with the technology sector being the only one among the S&P 500’s 11 categories to finish in positive territory. Shares of Broadcom climbed nearly 3 percent, while concurrently, Nvidia and Microsoft each experienced about a 2 percent increase, fueled by a report suggesting Microsoft might explore partnerships with Broadcom to develop custom chips.

Despite this, all three major U.S. stock indexes saw declines in earlier trading, amidst rising concerns over persistent inflation. The yield on the 10-year Treasury note continued to increase, indicating ongoing investor apprehension regarding inflation’s long-term effects on the economy.

Eyes are pointed toward the Federal Reserve as traders prepare for its anticipated interest rate announcement on Wednesday. This decision marks the last of the year, with many expecting a reduction in the key overnight lending rate by another quarter percentage point, following similar moves in September and October. Fed funds futures indicate an 89 percent probability for a cut, a notable rise from the 67 percent prediction just a month earlier.

Market analysts suggest that while a rate cut appears increasingly likely, the Fed’s forthcoming economic projections and remarks from Chair Jerome Powell will significantly influence market responses. U.S. investment analyst Bret Kenwell emphasized that investor sentiment may hinge on the Fed’s ability to foster optimism as the year closes, especially after recent stock and cryptocurrency losses.

Last week’s release of core personal consumption expenditures data, which came in below expectations, provided a boost for stocks, contributing to two consecutive weeks of gains in the major U.S. stock indices. Kenwell pointed out that the Fed faces a challenging landscape with a mix of factors, including stubborn inflation and an uncertain economic backdrop, further complicated by delayed economic data due to the recent U.S. government shutdown.

Looking ahead, investors will closely monitor earnings reports from major players in artificial intelligence, including Oracle and Broadcom, alongside retail giants like Costco and Lululemon. These reports are expected to reveal how companies are adapting to pressures within the technology sector and the broader economic environment as the year progresses.