Chinese Premier Li Qiang said that tech innovations should not be used as a way to restrict or contain other countries.

“To keep the competition healthy and bring out the greatest vitality, the only way is to enhance cooperation in innovation,” Li said via an official English translation of his Mandarin-language remarks made on Tuesday at the World Economic Forum in Davos, Switzerland.

“Scientific and technological fruits should benefit humanity as a whole, instead of becoming a means to restrict or contain the development of other countries,” Li added, calling for “more open measures.”

Li did not specifically name any countries in his remarks. Beijing has repeatedly asked Washington to remove restrictions on Chinese companies that prevent them from buying advanced technology from U.S. firms.

U.S. measures in the last two years have explicitly focused on cutting China off from high-end semiconductors used for artificial intelligence, out of concern that the tech is fueling the military capabilities of Beijing.

Following his speech, Li spoke about the risks and opportunities of generative AI, such as ChatGPT, in a brief question-and-answer session with World Economic Forum Founder Klaus Schwab.

“To put plainly, we human beings must control the machines instead of having the machines control us,” Li said, calling for a universal “red line in AI development” without specifying details.

He added that AI shouldn’t just benefit a small group of people, and that the interests of developing countries should be prioritized.

U.S.-based OpenAI’s ChatGPT surged in popularity just over a year ago, but isn’t officially available in China. Many similar chatbots from Chinese companies, such as Baidu and Alibaba, launched to the public in mainland China, after getting the green light from authorities in August.

”In AI, we are doing a lot of work to roll out policies and regulations,” Li said. “We introduced many laws and regulations to ensure the data security, AI-related ethics and generative AI services. All these are efforts to explore an AI governance framework suited to China’s national conditions.”

Li on Tuesday cast China as a supporter of multilateralism and called for further global cooperation.

In his speech to global business leaders, Li emphasized that China would take steps to address concerns about the flow of data across international borders and the ability to participate equally in government procurement.

Foreign businesses operating in China have found it difficult to comply with the country’s tightened restrictions on data collection and export, also complaining that domestic businesses have unfair advantages when competing for local government bids.

“China remains firmly committed to opening up,” Li said. “We will continue to create favorable conditions for the world to share in China’s opportunities.”

Li met with Swiss President Viola Amherd ahead of the Davos conference and is set to visit Ireland later in the week.

China on Monday announced it will give Swiss citizens visa-free entry, while the Swiss side will “provide more visa facilitation” for Chinese citizens and businesses investing in Switzerland. It is not clear when the measures will take effect.

Li separately said in his speech of Tuesday that the Chinese economy grew by around 5.2% in 2023. His comments come a day ahead of the National Bureau of Statistics’ scheduled release of official GDP figures and other data, set for Wednesday in Beijing.

“In promoting economic development, we did not resort to massive stimulus. We did not seek short-term growth while accumulating long-term risks,” Li said. “Rather, we focused on strengthening the internal drivers.”

Chinese President Xi Jinping is skipping Davos this year. His U.S. counterpart Joe Biden has likewise not attended event since he became president.

Xi earlier on Tuesday called for increasing the connections between domestic and overseas financial markets, while ensuring financial security, according to state media outlet Xinhua.

The Chinese leader was giving a speech about the “high-quality development of China’s financial sector” at a school for Chinese Communist Party officials, also known as the National Academy of Governance.

— CNBC’s Jenni Reid contributed to this report.

BEIJING — Chinese consumer electronics company Xiaomi on Thursday detailed plans to enter China’s oversaturated electric vehicle market and compete with automaker giants Tesla and Porsche with a car model it says it spent more than 10 billion yuan ($1.4 billion) to develop.

The company’s car model, known as Xiaomi SU7, “is in trial production and it will hit the domestic market in a few months,” CEO Lei Jun said in a Tuesday post on the X social media platform, formerly known as Twitter. “The price has not been finalized yet.”

Pronounced “Sue Qi” in Mandarin, the Xiaomi SU7 beats Porsche’s Taycan and Tesla’s Model S on acceleration and other metrics, Lei said during a three-hour presentation on Thursday.

He laid out bold ambitions to become an industry leader, including in autonomous driving and noted that the SU7 design team previously worked at BMW and Mercedes Benz.

Sales are due to begin in 2024, after more than three years of development— during which electric vehicles have taken off in China’s highly competitive market, and domestic automakers have begun to differentiate their products through ambitious offerings of car-compatible tech.

This is an area of potential advantage for Xiaomi, which is best known for its smartphones and home appliances and previously said it wants to create a “‘Human x Car x Home’ smart ecosystem.”

The SU7 is integrated with Xiaomi’s smartphones and internet-connected home appliances, Lei announced Thursday. He emphasized the company’s efforts to ensure data privacy among the devices and create a car that surpasses U.S. safety standards for rear-end collisions.

Lei said the vehicle will also be compatible with Apple’s iPhone, iPad, CarPlay and AirPlay. The U.S. giant has yet to release a car despite widespread speculation of such plans.

Two Xiaomi SU7 models appeared on a list of tax-exempt new energy vehicles published by the Ministry of Industry and Information Technology on Tuesday.

The document described the cars as purely battery powered, with driving range of 628 kilometers (390 miles) to 800 kilometers. The ministry listed a subsidiary of state-owned BAIC Group as the manufacturer for the Xiaomi SU7.

While the car isn’t yet available, Xiaomi has started selling its flagship smartphone and smart watch in the “aqua blue” and “olive oil green” colors of the SU7 sedan.

A price for the SU7 has yet to be revealed, but Lei hinted the purchase would not be cheap and dismissed rumors of a 99,000 yuan or 140,000 yuan price tag.

The Xiaomi car tech event comes as several domestic EV players have recently revealed new electric vehicles.

Nio on Saturday debuted its 800,000 yuan ($113,090) ET9, set to begin deliveries in the first quarter of 2025.Huawei’s Aito brand on Tuesday unveiled its M9 SUV — starting at 469,800 yuan and due to begin mass deliveries in late February 2024.Zeekr, backed by Geely, on Wednesday announced its 007 sedan would start at 209,000 yuan with deliveries beginning on Jan. 1.

Xpeng, which Xiaomi backed in 2019, is set to launch its X9 vehicle on Jan. 1, 2024. Ahead of the Thursday event, Lei shared pictures on popular Chinese social media platform Weibo which showed buildings lit up with messages of Xiaomi saying it salutes BYD, Nio, Xpeng, Li Auto and Huawei.

Xiaomi shares closed 0.25% lower in Hong Kong trading on Thursday. The company’s Hong Kong-traded shares are up by more than 40% so far this year. The business claimed record sales of more than $3 billion across various e-commerce platforms during this year’s Singles Day shopping festival.

Xiaomi has said it expects to spend 20 billion yuan ($2.8 billion) on research on development this year, up by 25% from 2022 and more than double the amount spent in 2020.

BEIJING — Livestream shopping is taking off in China, driving development of new tech products such as virtual human streamers and mobile data packages.

It’s an attempt to monetize — and innovate — in one of the few bright spots for an economy that’s largely slowing in growth.

Livestreaming e-commerce saw sales surge by 19% during the latest Singles Day shopping festival in November, while sales via traditional e-commerce dropped by 1%, according to McKinsey analysis.

Since the onset of the Covid-19 pandemic in early 2020, retailers in China have rushed to hire or develop in-house livestream hosts to sell products. Individuals, such as online influencer Austin Li, have become celebrities and overnight millionaires through using livestream commerce.

“Livestreaming, particularly livestreaming commerce, is something no country in the world has anything at the scale China has,” said Daniel Zipser, senior partner and leader of McKinsey’s Asia consumer and retail practice.

Now companies are testing out livestreaming hosts that are digitally created humans — either avatars that represent an actual human host, or a virtual human being created from scratch.

That use of virtual livestreaming hosts was a trend that stood out during this year’s Singles Day, said Xiaofeng Wang, principal analyst at Forrester.

“The quality has improved a lot this year, the virtual hosts look more real, at least the ones I’ve seen from Tencent, JD,” she said.

Wang added that using virtual livestreamers is a way for retailers to differentiate themselves from others, as well as reduce the cost of hiring a famous influencer, who might also carry the risk of being involved with celebrity scandals.

Tencent has launched a product that only needs a three-minute video of a user along with 100 spoken sentences to build a virtual avatar.

The company also has a “Zen Video” platform that lets people create simple promotional videos with a virtual human spokesperson.

Some companies are also combining ChatGPT-like artificial intelligence with livestreaming.

Online retail giant JD.com said its Yanxi virtual anchor product — based on the company’s AI model — was used in livestreaming sessions for more than 4,000 brands during Singles Day this year. One virtual streamer broadcast for 28 hours straight, according to JD’s technology arm. 

Baidu, best known for its search engine and Ernie AI chatbot, got into online shopping this Singles Day with the first at-scale use of its virtual human livestreaming product “Huiboxing” on its “Youxuan” e-commerce platform. The company claims virtual humans ran 17,000 streams from Oct. 20 to Nov. 11.

During that time, electronics giant Suning saw virtual human livestreaming contribute more than 3 million yuan ($420,000) in gross merchandise value on a single day, according to Baidu. GMV measures sales over time.

The digital human livestreamers are currently free for merchants to use on Baidu’s e-commerce platform and are based on the large language model behind Ernie bot, said Wu Chenxia, head of Huiboxing, adding the product uses big data to create multiple livestreaming scripts in an instant.

Regulators have their eye on the sector.

OpenAI’s ChatGPT isn’t officially accessible in China. Baidu’s Ernie bot wasn’t available for widespread use until late August when Beijing gave the green light.

Livestreaming success is also dependent on consistent video connection.

Potential buyers are almost always watching on their mobile phones, while sellers may try to livestream from the field where they are growing the produce.

Mobile service operators China Unicom and China Mobile have started to sell data packages geared toward livestreamers in parts of the country.

These packages splice the network so that livestreamers get priority service, similar to how an express lane on a highway may only allow buses to use it to avoid traffic, said Joe Wang of Huawei’s ICT department.

All that is based on having widespread 5G connectivity, which allows livestreamers to broadcast outdoors or simultaneously on multiple platforms, he said.

Looking ahead, 5.5G will theoretically increase download speeds by 10 times compared to 5G, and upload speeds by two to three times, Wang said. He expects 5.5G will reach consumers as early as 2025, while AI’s development is letting businesses quickly turn 2D images into 3D ones.

That means, Wang said, that 3D livestreaming may be a reality in about two years.

In the meantime, even companies such as Quantasing that sell adult education courses have jumped on the bandwagon by hosting livestreaming e-commerce – generating GMV of 13.3 million yuan in August.

CEO Matt Li said Quantasing holds more than 10 livestreaming sessions at once, and uses technology to decide what types of products and resources to dedicate to each one in order to generate the most revenue.

As fast as it’s grown, livestreaming is subject to China’s stringent regulation on content.

Analysts have also pointed out that livestreaming sales are often impulse buys, leading to many product returns.

From Jo Malone London to Chinese education company New Oriental, companies have turned to livestreaming sales as a way to stay connected with consumers in China and get them to spend money.

Importantly, businesses are shifting from using influencers, known as KOLs in China, to in-house livestreamers, McKinsey’s Zipser said.

“It is a clear indication [livestreaming] is not a hype, but it is something that companies are embracing and putting resources behind and the result of that is something that is here to stay,” he said.

BEIJING — U.S. chipmaking giant Nvidia has reportedly found a way to sell high-end chips to Chinese companies — while remaining compliant with U.S. rules aimed at curbing China’s access to the tech.

China accounts for 20% to 25% of Nvidia’s revenue in its data center business, its biggest unit.

Nvidia is set to deliver three new chips to domestic manufacturers in the coming days, Chinese financial media Cailian Press said Thursday, citing sources.

The chips — called HGX H20, L20 PCle and L2 PCle — are based on Nvidia’s H100 chip, the report said.

The H100 and A100 artificial intelligence chips were the first to be hit by new U.S. restrictions last year that aimed to curb sales to China. Nvidia said in a September 2022 filing the U.S. government would still allow it to develop the H100 in China.

Companies in China had then switched to Nvidia’s H800 and A800 chips, but the U.S. subsequently clamped down on those sales last month with new restrictions.

The H20’s computing power is only about 50% of that of the A100, said Bo Du, managing director at WestSummit Capital Management and a former engineer in the chip industry.

That’s “basically saying goodbye to physical simulation,” he said in Mandarin, translated by CNBC. While it’s possible to use clusters of lower-power chips to support large model calculations, he said there’s no ideal solution given the costs.

“In the near term, Chinese manufacturers have no better option and they will continue to buy Nvidia’s chips, while searching for replacements,” Du said, noting that some large internet companies have started to buy domestically-made AI chips at scale.

Demand for artificial intelligence computing power has only gone up as companies in China rush to develop local versions of OpenAI’s ChatGPT.

The Financial Times also reported the news of Nvidia’s new chips for the China market, citing a document the chipmaker distributed to potential customers.

Nvidia declined to comment. The U.S. Department of Commerce and the Bureau of Industry and Security did not immediately respond to a CNBC request for comment.

All three of Nvidia’s new chips have operating metrics outside the threshold of the U.S. restrictions, research firm SemiAnalysis said in an online post Thursday. The company operates a Substack tech newsletter that claims to have more than 64,000 subscribers.

“Nvidia is perfectly straddling the line on peak performance and performance density with these new chips to get them through the new US regulations,” SemiAnalysis said.

Nomura analysts previously found Nvidia’s Drive AGX Orin chip also did not meet all the criteria warranting a U.S. restriction on sales to China, allowing electric car companies in the country to still use the chip.

The U.S. has said its focus is on limiting China’s development of advanced tech for military use. President Joe Biden’s administration has also emphasized the country is in competition with China.

Domestic players are trying to develop workarounds to the U.S. restrictions.

In late August, Huawei released a smartphone that reviews indicated offers download speeds associated with 5G, thanks to an advanced semiconductor chip.

It’s not clear whether older equipment or alternative procurement processes were involved with the latest chip production.

— CNBC’s Arjun Kharpal contributed to this report.

BEIJING — Chinese tech giant Huawei reported revenue figures Friday that showed only a 1% increase in the third quarter from a year ago, according to CNBC calculations.

That’s despite the company’s release of a popular new smartphone in late August and growing sales within its electric car venture.

Huawei said revenue for the first three quarters of the year rose by 2.4% year-on-year to 456.6 billion yuan ($62.33 billion) — the highest for the period since 2020. U.S. sanctions on the Chinese telco maker started in 2019.

Despite those restrictions on Huawei’s ability to access high-end tech, reviews indicated the company’s new Mate 60 Pro smartphone offers download speeds associated with 5G — thanks to an advanced semiconductor chip.

Huawei quietly launched the phone in China in late August, and declined to share more during a seasonal product launch event in late September.

More than 1.6 million Mate 60 series devices were sold during the first six weeks of sales, according to Counterpoint Research.

The research firm estimated that the majority, about 75%, of units sold were Pro models — that’s about 1.2 million units sold.

Apple, which launched its iPhone 15 in September, is expected to sell 10 million units of the new phone in China this year, for an expected total of 45.5 million iPhone sales in the country, according to Shanghai-based CINNO Research estimates.

The U.S. company saw smartphone sales fall by 10% in the third quarter from a year ago, while Huawei’s sales surged by 37%, Counterpoint Research said Thursday.

Huawei has also built up a presence in China’s fast-growing new energy vehicle market, which includes hybrid and battery-powered cars.

The company sells its operating system and components, such as for driver-assist tech, to car manufacturers.

In December 2021, Huawei launched its own car brand Aito in collaboration with manufacturer Seres.

Orders for Aito’s latest M7 topped 60,000 as of Oct. 16, just about a month after its release, according to a social media post from Richard Yu, who heads Huawei’s car-related and consumer business.

On Wednesday, Aito said pre-orders for its forthcoming M9 SUV had topped 15,000.

Huawei is not publicly traded and did not break out revenue by business segment in its latest update.

The telecommunications giant said it recorded partial gains from the sale of certain businesses, but did not specify which ones.

Huawei said its net profit margin for the first three quarters of the year was 16%. That’s up from a profit margin of 15% reported for the first half of the year, when revenue grew by 3.1% to 310.9 billion yuan.

Third-quarter revenue was 145.7 billion yuan, up by 1% from the 144.2 billion yuan in the year-ago period, CNBC calculations of Huawei figures showed.

Huawei continued its efforts to expand its patent licensing business during the third quarter with Xiaomi and Ericsson deals, which covered 5G connectivity.

The telecommunications giant has rolled out 5G-based business applications in mining, ports and manufacturing, but it was unclear from Friday’s release how much revenue, if any, they generated for the company in the third quarter.

Huawei also pressed ahead in international markets by expanding its cloud business to Saudi Arabia in September. The company said this week it opened a research lab in Finland for testing health and fitness wearables.

The U.S. has maintained the Chinese telecommunications giant is a national security risk due to alleged links to the Chinese Communist Party and the country’s military. Huawei has repeatedly denied the existence of any such risk.

— CNBC’s Arjun Kharpal contributed to this report.

BEIJING – China’s economy is running into more challenges.

Credit data for July released Friday showed a slump in demand from businesses and households to borrow money for the future. Real estate problems persist with once-healthy developer Country Garden now on the brink of default. Consumer sentiment is weak.

“The weak July credit data suggest the downward spiral of the property sector continues, and worsening geopolitical tensions add to the uncertainty,” Lu Ting, chief China economist at Nomura, and a team said in a report Friday.

“In Japan during the 1990s, corporates might have paid down their debt to improve their chances of survival, but in today’s China, corporates and households are cutting their borrowing due to a lack of confidence (and trust),” the report said.

New local currency bank loans plunged by 89% in July from June to 345.9 billion yuan ($47.64 billion), less than half the 800 billion yuan analysts had forecast in a Reuters poll.

The July new yuan loan number was the lowest since late 2009, according to Reuters.

Those figures “should mark a low” since policy moves in June could have moved up some demand, Xiangrong Yu, chief China economist at Citi, and a team said in a note.

“Yet all the factors just cannot mask how weak credit demand is and how low risk appetite is,” the analysts said, noting expectations for rate cuts by the end of September. Without such cuts, they expect a greater risk that China misses its growth target of around 5% this year.

On Tuesday, China is set to release July economic data that’s expected to show no change from June in the pace of growth for industrial production and fixed asset investment, according to a Reuters poll.  

Retail sales are expected to rise 4.7% year-on-year pace in July, slightly faster than in June, the poll showed.

China’s massive real estate sector, where the majority of household wealth is parked, has reemerged as an area of concern that it could drag down the broader economy.

Developer Country Garden announced over the weekend it was suspending trading in at least 10 of its mainland-China traded yuan bonds.

Last week, the company missed coupon payments on two U.S. dollar-denominated bonds, according to Reuters.

Country Garden’s U.S. dollar bonds account for just under half of outstanding high-yield U.S. dollar-denominated bonds, according to Goldman Sachs analysis.

China U.S. dollar bonds that are of investment grade account for 43% of the total, the analysis showed.

“Given that the majority of [high-yield] developers have either defaulted or conducted bond exchanges, we believe rising stresses amongst the remaining [high yield] developers are unlikely to have broader impact on the offshore bond market,” the Goldman analysts said in a report Friday.

“We believe of greater concern is whether rising stresses will spillover to [investment grade] developers, most of whom are state owned enterprises [SOEs].”

State-owned companies have generally found it easier to obtain loans in China, where state-owned banks dominate. State-owned developers have also fared better in terms of recent sales than non-state-owned developers, data show.

However, China’s entire real estate sector still needs to contract by about 10 percentage points to reach a similar level of GDP contribution as Japan or South Korea, said Louis Lau, director of investments and emerging markets portfolio manager at Brandes Investment Partners.

He pointed out that while real estate has contributed to about 30% of GDP in China, that share is in the lower 20 percentage points in South Korea and Japan.

In 2020, Beijing began an earnest crackdown on developers’ high reliance on debt for growth. Authorities have eased their stance in recent months, with a notable shift in late July, but stopped short of large-scale stimulus.

“The more the government tries to help the real estate industry, the longer it takes for the industry to find a reasonable bottom,” Lau said.

He is underweight China, with selective investments in some consumer names and industries he expects will outperform.

U.S. stocks fell Tuesday after Walmart cut its earnings forecast, sending other retail shares lower and adding to concern that consumer spending might not be strong enough to keep the U.S. out of a recession.

The Dow Jones Industrial Average fell by 128 points, or 0.4%. The S&P 500 lost 0.7% and the Nasdaq Composite declined 1.2%.

Walmart said Monday that it cut its quarterly and full-year profit estimates because of rising food inflation. This alarmed investors who deliberated the implications for other retail stocks. The big-box retailer said higher prices are spurring consumers to pull back on general merchandise spending, particularly in apparel.

Walmart plunged 8% Tuesday and dragged other retailers with it. Target and Kohl’s each dropped about 5%, while Amazon and Dollar General each fell 4%. Costco shed 3%. The SPDR S&P Retail ETF was down by more than 4%.

“The most important thing from the Walmart announcement is how inflation is changing what people buy,” said Robert Cantwell, portfolio manager at Upholdings. “Food now makes up a bigger share of individuals’ budgets, but overall spending still generally remains intact.”

“The general trend in the market right now is most companies are coming in below estimates, but not as badly as the market feared,” he added. “This means the process for estimates themselves is broken since they don’t properly reflect the market’s expectations at a given moment in time.”

Elsewhere, General Motors fell 4% after the company missed earnings estimates, citing supply chain disruptions stemming from Russia’s war on Ukraine and global Covid lockdowns.

UPS shares fell 3%, despite the company posting earnings and revenue beats for the second quarter, after the shipping giant reported declines in its international and supply chain businesses.

On the flip side, Coca-Cola shares rose 1% after the beverage giant topped earnings and revenue expectations, citing a sales volume recovery from the pandemic and higher pricing.

Shares of McDonald’s added nearly 1% following mixed second-quarter results, in which net sales were hurt in part by the closure of locations in Russia and Ukraine, but international growth elsewhere fueled a rise same-store sales.

Industrial stocks gave a positive showing too. Shares of 3M rose 6% after beating earnings and revenue estimates and announcing plans to spin its health care business into a separate publicly traded company. General Electric posted better-than-expected results citing recovery in the aviation industry that boosted its jet engine business. Its shares gained almost 4%.

Traders are also bracing for an onslaught of mega-cap tech earnings and economic data this week, as well as the outcome of the Federal Reserve meeting, that will help Wall Street direct its expectations for the rest of the year.

“I think that there’s going to be a bifurcated market,” VantageRock Capital’s Avery Sheffield said during CNBC’s “Closing Bell: Overtime.” “I think the bottom might be in certain stocks, but nowhere in others. So this actually could be one of the most dynamic earnings seasons we’ve seen in a long time.”

Stocks traded in a narrow range during Monday’s session, with the S&P 500 adding 0.1%. The Dow Jones Industrial Average climbed 90.75 points, or 0.3%. The tech-heavy Nasdaq Composite lagged, sliding 0.4%. All of the major averages are on track for their best month of the year.

Fed meeting and the market’s expectations

On Tuesday, the Federal Reserve commenced its two-day policy meeting. Traders are widely expecting a three-quarter percentage point hike and will be looking for clues on the future interest rate path and what it could mean for equity market pricing.

“We expect the Fed will signal that they are still following the data and leave the door open for at least one more 75 bps increase – if not multiple 75 bps rate increases – and market interest rate expectations will become less sanguine about the Fed pausing rate hikes any time soon,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.

Stock futures gained Friday as Wall Street looked to grind out a rare positive week in what has been a rough first half of the year.

Futures tied to the Dow Jones Industrial Average rose 222 points, or 0.7%. Futures for the S&P 500 were 0.8% higher, while Nasdaq 100 futures advanced 0.8%.

The moves in futures come as the stock market appears to have found some stability this week, at least for the short term. After an afternoon rally on Thursday, the S&P 500 is up 3.3% for the week, while the Nasdaq Composite is up 4% and the Dow is 2.6%.

All three averages are looking to snap three-week losing streaks.

“It’s a relief measure,” Allianz’s Mohamed El-Erian said Friday on CNBC’s “Squawk Box.” “Its relief after a difficult week, a difficult six weeks, a difficult year, and we’re having a relief rally, and that’s really welcome.”

Still, the firm’s chief economist pointed to troubling signs in the bond market, which is pricing in a “higher risk of a recession” just as the Federal Reserve shifts to a more aggressive stance against inflation.

“The market is saying ‘whoa, be careful,’ because the economy is weakening not just in the U.S., but around the world. So it’s two different narratives right now in the stock market and the bond market. And the key issue is that once again, it is the bond market that is leading the Fed, and not the Fed that is leading the market,” El-Erian continued.

Volatility on Wall Street could be elevated Friday, as FTSE Russell completes its annual index rebalancing, shifting the makeup of tracking indexes that contain trillions of dollars. Rebalancing days are typically accompanied by heavy trading volumes as well.

Economic data will be a key focus ahead, as investors try to determine if the U.S. economy is falling into a recession. New home sales data is due out at 10 a.m. ET and the final University of Michigan consumer sentiment report for June will follow later in the day.

The consumer sentiment reading could be particularly important for investors, as Federal Reserve Chair Jerome Powell said that a surprise drop in the preliminary reading was one of the reasons the central bank hiked its benchmark interest rate by three-quarters of a percentage point earlier this month.

“Recession talk remains the focal point on Wall Street and that means whatever stock market rebounds emerge will probably be short-lived,” Oanda senior market analyst Ed Moya said in a note. “Wall Street won’t have any answers anytime soon for the questions on when will inflation peak, how soon will we see a recession, and how high will the Fed raise rates?”

On the corporate front, shares of FedEx moved higher in extended trading despite a mixed fourth-quarter report after the logistics company delivered an upbeat earnings forecast. Carnival Cruise Line is scheduled to release a business updated on Friday morning.