The US stock market is poised for a rebound following a sharp decline in the S&P 500 on Thursday, which pulled the index back toward its 20-day moving average. Pre-market futures signal optimism, with S&P contracts up approximately 0.6% and Nasdaq 100 futures advancing 1.2%, largely buoyed by robust earnings from tech giants Amazon and Apple. Amazon shares jumped 13% in after-hours trading after reporting its fastest AWS cloud growth in nearly three years, while Apple beat revenue expectations and issued a strong holiday outlook, lifting its stock in late trading.
As we can see the adoption of AI is a positive catalyst for the market, today Chevron, Exxon Mobil and Abbvie are reporting earnings. But cash flows are eaten by the massive investments in AI, something that some analysts worry about. Investors are fully invested, cash balances are low, we know this situation occurs near market tops. Another sign of increasing speculation is excessive leverage. Margin debt has surged through the first nine months of 2025 at the fastest pace since 1999, indicating leveraged speculation that could exacerbate pullbacks. Market breadth is deteriorating, with only a handful of stocks propping up benchmarks.