Dow Jones futures decline as AI rally falters, Walmart earnings in focus

• Dow Jones futures edge lower amid mounting concerns over stretched valuations and the sustainability of the AI-driven rally.
• Market sentiment remains cautious as the FOMC Meeting Minutes indicated that most Fed members favored holding rates steady.
• Traders await earnings reports from Walmart and Workday, followed by US Purchasing Managers Index data.

Dow Jones futures fall by 0.11%, trading around 44,950, along with the S&P 500 futures and Nasdaq 100 futures steady around 6,400 and 23,300, respectively, during European hours on Thursday ahead of the opening of the North American session.

US stock futures struggle after a tech-led Wall Street selloff, amid growing concerns over stretched valuations and the sustainability of the AI-driven rally. Many factors are cited behind the selloff, including recent remarks from OpenAI CEO Sam Altman suggesting the artificial-intelligence boom shows bubble-like signs.

On Wednesday's regular market, the Nasdaq Composite slid as much as 1.92% before paring losses to close 0.67% lower, while the S&P 500 slipped 0.24%. Big Tech and chipmakers extended losses as investors rotated out of high-flying stocks. Amazon, Apple, and Alphabet each fell over 1%, while Broadcom slipped 1.3% and Intel tumbled 7%, per CNBC.

Traders may adopt caution as the Federal Open Market Committee's (FOMC) Minutes for the July 29-30 meeting indicated that most Federal Reserve (Fed) officials favored holding rates steady. Policymakers emphasized that inflation risks outweighed labor market concerns during last month's meeting. The CME FedWatch tool suggests that Fed funds futures traders are currently pricing in an 82% chance of a rate cut in September.

Traders will likely observe results from Walmart and Workday later in the day. The preliminary S&P Global ), along with weekly Initial Jobless Claims data, will also be eyed. Market participants will likely shift their focus toward Fed Chair Jerome Powell's speech at the Jackson Hole Symposium in Wyoming on Friday, which may provide clues about the September policy decision.