Nasdaq Futures Plunge Over 1% Amid AI Earnings Concerns
On the 22nd (local time), the U.S. stock market opened lower amid concerns over AI companies' investment burdens and profitability. During the session, the Nasdaq Composite widened its losses, falling into the 2% range, while the S&P 500 also declined. The previous day, the U.S. market had closed higher, buoyed by solid corporate earnings. The Dow Jones Industrial Average rose 0.69%, the S&P 500 gained 0.58%, and the Nasdaq Composite climbed 1.05%, while the Philadelphia Semiconductor Index (SOX) advanced about 2%, attempting a rebound after its recent sharp slide. "When Will AI Investments Pay Off?"… Earnings Reverse the Rally The volatility index (VIX), which had closed the previous day at 16.68, briefly rose above the 18 level in premarket trading.
The core of the decline was corporate earnings reports. Meta Platforms posted results that beat market expectations, but its stock fell more than 6% intraday as concerns over AI investment and funding costs came to the fore. Lam Research plunged 9.19% intraday despite reporting quarterly results that topped market forecasts, while Tesla turned higher after opening lower, finishing up 0.21%. The earnings-driven selloff spread across the broader semiconductor sector, with Nvidia falling in the 2% range, AMD and Micron down 3–4%, and Intel down more than 5%. AI cloud company CoreWeave also saw its stock drop on rising debt concerns.
Military tensions in the Middle East added another variable. Fears of supply disruptions stemming from the war with Iran and Houthi rebel attacks on Saudi Arabia sent international oil prices surging: in premarket trading, December West Texas Intermediate (WTI) crude rose more than 2% to near $99–100 per barrel, while Brent crude traded at $111.66–112 per barrel. Rising oil prices stoke inflationary pressure, weighing on the Federal Reserve's room to ease monetary policy.
The bond market, however, moved in the opposite direction. Risk-averse demand flowed into U.S. Treasuries, pushing the 10-year yield down to the 5.03–5.048% range intraday. The simultaneous decline in stocks and Treasury yields suggests this selloff differs from a typical rate-driven tech selloff.
U.S. initial jobless claims, released an hour before the market open, came in at 194,000, down from 200,000 the previous week. Markets are focused on the Federal Reserve's benchmark rate decision at the Federal Open Market Committee (FOMC) meeting on the 27th–28th. The U.S. 10-year Treasury yield officially stood at 5.12% on the 21st.
