Tuesday Markets: Pre-Market Movers, GME Awaits Q3, Tesla Sued

Key Takeaways

• Markets steady: Futures for the S&P 500, Nasdaq, and Dow show little movement after Monday’s 0.6% decline in major indexes.
• Nvidia under pressure: Shares fell 2.6% after China launched an antitrust probe into its 2020 Mellanox acquisition.
• Tesla faces lawsuit: Family of a deceased driver claims Tesla misled consumers about its Autopilot system’s capabilities.
• GameStop earnings on watch: The retailer reports Q3 results today after a brief stock rally tied to a post from "Roaring Kitty."
• EU targets Google and Meta: Regulators are investigating whether a secret ad deal violated rules on personalized ads for teens.

Stock futures were largely unchanged Tuesday morning after the S&P 500 and Nasdaq Composite both slid 0.6% on Monday. Futures linked to the S&P 500 hovered near flat, while Nasdaq 100 futures edged up 0.05%. Dow Jones Industrial Average futures dipped 0.02%.

Investors continue to weigh regulatory pressures on tech firms and await key earnings reports. Here’s a closer look at the main market movers.

Pre-market Movers:

Nvidia Hit by China Antitrust Probe

Shares of Nvidia (NASDAQ:NVDA) dropped 2.6% on Monday after China's State Administration for Market Regulation (SAMR) announced an investigation into the chipmaker. The probe centers on Nvidia’s 2020 acquisition of Mellanox, an Israeli firm that builds network hardware for data centers and servers.

The Chinese regulator claims Nvidia may have violated antitrust laws. While specifics of the charges remain unclear, the inquiry highlights growing regulatory scrutiny of U.S. tech companies abroad.

This comes just days after the Biden administration unveiled its latest restrictions on semiconductor exports, adding to Nvidia's trade woes. The chipmaker has already faced curbs on its AI chips, which are essential for advanced computing tasks.

GameStop Prepares to Report Q3 Results

GameStop (NYSE:GME) shares dipped in premarket trading as the video game retailer gears up to release its third-quarter earnings report after the market closes Tuesday.

Investors are watching closely after a surge in GameStop's stock last week. The spike followed a cryptic social media post by Keith “Roaring Kitty” Gill, a key figure in the 2021 meme-stock craze. The post sparked renewed interest in the stock, though analysts remain skeptical.

Wall Street's view of GameStop is grim. The one analyst tracked by Visible Alpha rates the stock as "underperforming" with a $10 price target — far below Monday's closing price of $27.93.

While GameStop has tried to pivot toward e-commerce and digital collectibles, its business model remains under pressure. Tuesday's earnings report will likely reveal whether its turnaround strategy is gaining traction.

Tesla Sued Over Autopilot Crash

Tesla (NASDAQ:TSLA) is facing a lawsuit from the family of a driver who died in a 2023 crash involving a 2021 Model S. The family alleges that Tesla made false claims about the safety and capability of its Autopilot system, a partially automated driver-assist feature.

The crash occurred when the Model S hit a parked fire truck while Autopilot was engaged. The family initially filed the case in state court in Contra Costa County, California. However, Tesla successfully moved it to federal court in the Northern District of California.

Shifting the case to federal court could raise the burden of proof for the plaintiffs. In fraud claims, plaintiffs must provide stronger evidence in federal cases than in state-level suits.

This lawsuit adds to Tesla’s growing list of legal challenges over Autopilot, a feature that has faced criticism from regulators, safety advocates, and industry experts.

EU Regulators Probe Google Over Teen Ads

Alphabet (NASDAQ:GOOGL) is under scrutiny from European regulators over its advertising practices. The Financial Times reported that authorities are investigating Google's ad partnership with Meta (NASDAQ:META), the parent company of Instagram.

The deal, which has since ended, allowed Instagram to place ads on YouTube that targeted teens. This arrangement appears to have bypassed Google's internal rules, which bar personalized ads for users under 18.

Both Alphabet and Meta shares were higher in premarket trading. The inquiry highlights growing pressure on tech giants over privacy and child protection.