Gotrade News - US stock futures fell as a Broadcom-led chip selloff paused the artificial intelligence rally. Traders now await a pivotal US jobs report that could reshape Federal Reserve rate expectations.
S&P 500 futures dropped 0.3% to 7,574.75, while Nasdaq 100 futures fell a deeper 0.7%. Weakness in semiconductor shares drove the broad pressure that spread across global markets.
Key Takeaways
- S&P 500 futures fell 0.3% and Nasdaq 100 futures dropped 0.7%.
- Broadcom shares plunged 12.6% after its AI chip outlook disappointed.
- Friday's US jobs report will shape Federal Reserve rate expectations.
According to Investing.com, Dow futures also edged lower to 51,642.0 on the session. The pressure centered on technology stocks that had recently led the broad US market's gains.
The tech-heavy Nasdaq 100 led the decline with a 0.7% drop in its futures. The AI-driven rally that lifted equities in recent weeks now appeared to lose its momentum.
Chip Stock Selloff
Broadcom (AVGO) shares plunged 12.6% after the company left its 2027 AI chip outlook unchanged at $100 billion. Investors viewed that guidance as less ambitious than the already lofty market expectations had hoped.
The Philadelphia Semiconductor Index dropped 2.2% amid broad selling pressure across major chip names. Micron (MU) shares fell a steep 7.74%, ranking among the session's deepest decliners.
AMD (AMD) shares also declined 3.56% as negative sentiment spread through the chip sector. Nvidia bucked the trend, rising 2% and helping limit the broader index's losses.
The divergence showed that investors are now sorting AI names far more carefully and selectively. Stocks carrying premium valuations now face a much higher bar for delivery from investors.
The Broadcom slide signaled that investors are turning more selective on richly valued AI names. A merely steady outlook with no increase now reads as insufficient to a demanding market.
As reported by Investing.com, the MSCI Asia-Pacific index excluding Japan fell 1.6%. South Korea's Kospi tumbled more than 6% during a notably volatile trading session on Friday.
Japan's Nikkei also slipped 1.3% as the pressure on global technology shares spread. The selloff rippled across Asian markets after the negative tone set by US equities.
Focus on Jobs Data
May nonfarm payrolls data is scheduled for release on Friday local time and dominates focus. Economists forecast 85,000 jobs added with the unemployment rate expected to hold at 4.3%.
Slower job growth could strengthen market expectations for Federal Reserve rate cuts in the months ahead. The report remains a key input for the Federal Reserve's upcoming monetary policy decision.
Traders held back ahead of the release to gauge the central bank's likely policy direction. Market volatility could rise sharply if the payrolls figure deviates far from the consensus forecasts.
In commodities, Brent crude traded near $95 per barrel during the volatile session. US crude sat at $92.73, while the Japanese yen weakened to 159.96 against the dollar.
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