8am: Wall Street futures lower as tech rout spreads
Wall Street looked set for a sharply weaker open on Friday as a global sell-off in semiconductor stocks gathered pace, with disappointing corporate earnings adding to the risk-off mood.
Futures pointed to the Nasdaq opening around 1.5% lower, while the S&P 500 was called down 0.8% and the Dow Jones Industrial Average 0.6% lower.
Chipmakers also led Thursday's retreat, sending the Nasdaq down 1.5%, while the S&P 500 fell 0.5% and the Dow slipped 0.2%.
"We're seeing a bit of a shakeout in markets led by semiconductor stocks," said Saxo Markets analyst Neil Wilson. "Asia took the cue from a sharp fall on Wall Street, with the Nikkei 225 down 4%, while the Kospi would have been rattled had it not been for a holiday."
The sell-off gathered momentum after results from Taiwan Semiconductor Manufacturing Co (ADR) (NYSE:TSM) failed to reassure investors about lofty AI-related valuations. Shares in TSMC dropped 7% in Taiwan, dragging the broader chip sector lower.
The Philadelphia Semiconductor Index is now down more than 8% this week, leaving it on the brink of bear market territory. Memory-chip makers SanDisk and Western Digital each fell more than 9%, while Micron, Intel, Broadcom and AMD all lost over 5%. Alphabet also shed 4% after reports suggested its Gemini 3.5 Pro AI model had been delayed by several months.
Pressure on futures intensified before the opening bell after Netflix Inc (NASDAQ:NFLX, XETRA:NFC) slumped almost 10% in pre-market trading. Although the streaming giant narrowly beat earnings forecasts, second-quarter revenue came in slightly below Wall Street expectations, disappointing investors.
"Netflix disappointments are on their way to becoming a regular series rather than just a one-off event – with this latest let-down following hot on the heels of poorly received first-quarter numbers," commented AJ Bell investment director Russ Mould.