US futures continue to trim losses after early beatdown but AI worries linger

As we look to the session ahead, it seems that Wall Street has finally decided to pick itself up off the floor. But after the beating earlier today, I wouldn't be rushing to vindicate this bounce and label it as a comeback just yet.US futures are continuing to trim losses with S&P 500 futures now down just 0.3% and Nasdaq futures lower by 0.4%. That's quite the turnaround from earlier in the day when Nasdaq futures were down by over 2% at one point.The initial selloff came as investors digested the US midterm election results, with the Democratic sweep raising concerns over tougher scrutiny of AI infrastructure spending and data centre development. As such, that puts Wall Street in a bit of an awkward debate right now.In the past couple of months, investors have been questioning whether big tech is throwing too much money at AI infrastructure without enough to show for it. The astronomical spending commitments have been difficult to justify, especially when the returns remain something of a guessing game for the most part.Now, wouldn't a slowdown in AI spending actually be a good thing then? Well, yes and no I would say.On the one hand, tighter spending discipline could be just what investors have been asking for. That means less aggressive capex being deployed and that would in turn ease pressure on cash flows and force tech firms to actually walk the talk. In other words, it will get them to demonstrate that their AI investments can actually generate meaningful returns.But then, here's the catch. There's a big difference between slowing down on spending voluntarily and being forced to slow down simply because of regulatory hurdles.If it is more of the latter and we start to see restrictions on data centre development start delaying projects, then that could leave AI companies struggling to secure enough computing capacity to meet growing demand. And with much of the tech sector's growth expectations riding on the AI investment boom, that presents another problem altogether.If spending plans are scaled back, that could also lead to chipmakers, equipment suppliers and data centre operators facing weaker orders and slower revenue growth in the bigger picture.In other words, Wall Street might get the spending restraint that it wants so badly before this but perhaps not in the way it had hoped for.At least for the time being, the recovery in US futures remains tentative at best. If anything, I would be watching whether semiconductor stocks and the broader AI infrastructure trade can find some stability when we get to the Wall Street open later in the day. This article was written by Justin Low at investinglive.com.