• Tech stocks experienced their worst weekly performance since early April, weighed down by concerns about the potential bursting of the AI bubble.
•  The Senate is expected to vote on a bipartisan stopgap funding bill late Sunday.
• The terms of the potential deal negotiated among lawmakers reportedly included a December vote to extend Affordable Care Act credits for a year.

U.S. stocks are poised for a positive open in the new week, signaling a potential reversal after the market snapped a three-week consecutive gain last week. Hopes for a resolution to the government shutdown brightened after a Politico report, citing two people, said the Senate had struck a deal to end the impasse.

The agreement was reportedly negotiated in part by a few Democratic senators along with lawmakers on the other side of the aisle. The Senate is expected to vote on the agreement Sunday night, paving the way for the passage of a stopgap funding bill that will lay the groundwork for a larger funding bill.

According to an Axios report, the deal terms included a December vote to extend Affordable Care Act credits for a year, assistance for government employees laid off during the shutdown, and a provision to fund Supplemental Nutrition Assistance Program (SNAP) benefits through Sept. 30.

President Donald Trump created a flutter by stating on his social media account that“A dividend of at least $2000 a person (not including high-income people!) will be paid to everyone.”

How Futures Are Trading

As of 9:15 p.m. ET on Sunday, the Nasdaq 100 futures climbed over 1%, and the S & P 500 and Russell 2000 futures gained about 0.60% each, while the Dow futures rose a more modest 0.20%.

On Stocktwits, retail sentiment toward the SPDR S & P 500 ETF (SPY), an exchange-traded fund that tracks the S & P 500 Index, improved to 'neutral' as of late Sunday from 'bearish a day ago. The Invesco QQQ Trust (QQQ) ETF, which tracks the Nasdaq 100 Index, attracted 'bullish' sentiment, marking a recovery from the 'extremely bearish' sentiment that was seen for much of the past week. The message volume on the SPY and QQQ streams remained 'high.'

Commenting on the QQQ stream, a bullish watcher stated that“the chance of government reopening in this coming week is improving.”“This chicken game is hurting both parties and Americans.”

Another user said Friday dip-buyers will be rewarded this week.

How Markets Fared Last Week

Stocks experienced a volatile week as traders reacted to headlines regarding a potential artificial intelligence (AI) bubble burst and better-than-expected private payroll data, as well as the earnings reports released last week. The SPY,  QQQ,  SPDR Dow Jones Industrial Average ETF Trust (DIA), and the iShares Russell 2000 ETF (IWM) fell 1.63%, 3.07%, 1.22% and 1.88%, respectively.

The tech-heavy Nasdaq Composite Index posted its worst week since the week of April 4, when it slumped 10% amid the Trump tariff announcement.

Wedbush analyst Daniel Ives called the past week's development a“building Northeaster Street storm for tech stocks that hit a turbulent moment this past week.”  The analyst said Palantir's post-earnings plunge, despite a robust report, added to fears around the "AI Bubble" talk from the bears, with worries about Nvidia China revenues being shut off, fears of the "too big to fail" OpenAI chatter, and Michael Burry's tweet all serving to aggregate the weakness.

“In a nutshell, we view this as a short-lived white knuckle moment for tech stocks as we believe tech stocks will up another 8%-10% into the rest of the year as investors look to play the AI Revolution and the 2nd/3rd/4th derivatives now playing out across consumer and enterprise names.”

Key Catalysts To Watch Out For

Speeches by Federal Reserve officials dominate the unfolding week's economic calendar due to the suspension of government releases in the wake of the shutdown.

Noteworthy names featured on the earnings calendar for the day are EVgo (EVGO), eToro (ETOR), Instacart (CART), Monday (MNDY), Tower Semi (TSEM), TreeHouse Foods (THS), Tyson Foods (TSN), BigBear (BBAI), CoreWeave (CRWV), Occidental Petroleum (OXY), Paramount Skydance (PSKY), Rigetti Computing (RGTI), TeraWulf (WULF) and Getty Images (GETY).

How Other Markets Fared

Crude oil futures climbed moderately late Sunday after pulling back by over 2% in the past week, and gold futures also gained ground. The 10-year U.S. Treasury note yield moved back above the 4.1% level. The U.S. dollar was slightly firmer against its counterparts. Most major Asian markets also advanced, led by Japan's Nikkei 225 average, as traders reacted to the positive cues from the U.S.

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