FILE PHOTO: A view shows the New York Stock Exchange (NYSE) Wall Street entrance in New York City, U.S., April 7, 2025. REUTERS/Kylie Cooper/File Photo

By Twesha Dikshit and Purvi Agarwal

(Reuters) -Wall Street futures were flat to lower on Tuesday as concerns around elevated technology valuations resurfaced, while markets closely watched progress toward the end of the longest government shutdown in U.S. history.

Technology and AI shares rebounded on Monday from last week's steep losses, on expectations that the government would reopen as soon as this week, as the prolonged closure weighs on the economy and contributes to a data blackout for the Federal Reserve and traders alike.

The Nasdaq posted its largest daily gain since May 27 and the S&P 500 recorded its biggest one-day percentage rise since mid October in the previous session.

"Following the government reopening, we assume that delayed economic data will be released over the coming few weeks, lifting some of the fog that has lingered since early October," said Tom Nelson, Franklin Templeton Investment Solutions' head of market strategy.

"Assuming the government ultimately reopens soon, strong seasonals and resilient growth may move back to front-of-mind considerations."

Markets will parse through a weekly update of ADP's private payroll figures before the opening bell for clues on the labor market's health.

At 6:50 a.m. ET, Dow E-minis were up 7 points, or 0.01%, S&P 500 E-minis were down 14.25 points, or 0.21% and Nasdaq 100 E-minis were down 101.5 points, or 0.39%.

Worries around AI-related companies that have been the main drivers of the bull market this year persisted as traders evaluated returns from technology and circular expenditure within the sector.

Nvidia shares dropped 1.5% in premarket trading after Japanese technology investor SoftBank Group disclosed that it had offloaded the rest of its shares in the AI bellwether for $5.83 billion.

Nvidia-backed CoreWeave's shares dropped 9.3% after the cloud computing firm trimmed its annual revenue forecast. The company's stock has more than doubled since going public earlier this year.

As the third quarter earnings season approaches its conclusion, profit growth at S&P 500 companies is expected to increase 16.8% year-on-year compared to initial estimates of 8%, according to LSEG data.

FEDERAL RE-OPENING AWAITED

The U.S. Senate on Monday approved a compromise that would end the shutdown that has disrupted food benefits for millions, left federal workers unpaid and snarled air traffic.

The bill will head next to the House of Representatives for approval before being sent to U.S. President Donald Trump for his signature, with betting markets like Polymarket fully pricing in a reopening this week.

Meanwhile, Trump said the U.S. faced an economic and national security disaster if the Supreme Court ruled against his use of an emergency powers law to impose sweeping tariffs.

Among other moves, Rocket Lab shares jumped 9.5% after the space company posted record third-quarter revenue.

Quantum computing firm Rigetti Computing reported third-quarter revenue below estimates, sending its shares falling 3.3%.

Paramount Skydance shares gained 4.5% after the newly merged media firm announced more cost cuts and plans to invest $1.5 billion in its streaming and studio divisions.

U.S. bond markets were closed for a public holiday.

(Reporting by Twesha Dikshit and Purvi Agarwal in Bengaluru; Editing by Maju Samuel)