Dow, S&P 500, Nasdaq futures trade flat after Wall Street’s record-breaking rally fizzles out

US stock futures held steady as uncertainty around Federal Reserve policy rattled investors even as the tech industry continued to make big moves on AI.

Futures attached to the Dow Jones Industrial Average (YM=F) edged up 0.1%. Futures attached to the benchmark S&P 500 (ES=F) and the tech-heavy Nasdaq 100 (NQ=F) fluttered around the flatline.

Stocks fell for the second day in a row on Wednesday, ending a record-breaking rally fueled by a rate cut and AI fervor. Fed Chair Jerome Powell’s cautious remarks, combined with comments from other central bank policymakers this week, rattled Wall Street’s expectation of two more rate cuts this year.

Meanwhile, the tech sector continued to barrel forward with major investments in AI. Alibaba (BABA) pledged to exceed $50 billion in AI spending, while Intel (INTC) reportedly approached Apple (AAPL) about securing an investment in the struggling chipmaker. Earlier this week, Nvidia (NVDA) revealed a $100 billion partnership with OpenAI, and last week it announced its own $5 billion investment in Intel.

On Thursday, Costco (COST) will report earnings. Investors expect to see a jump in sales as shoppers pursue deals amid economic uncertainty.

The main event for markets lands Friday with the release of the Fed’s preferred inflation gauge, the Personal Consumption Expenditures index. Although Fed officials have expressed concern about a slowdown in the labor market, investors are concerned that if prices rise too quickly, policymakers may reconsider instituting more rate cuts.