Stock futures are exhibiting a mixed outlook this morning following record highs reached by the Dow Jones Industrial Average and the S&P 500 yesterday. Concerns surrounding a potential AI bubble are casting a shadow over technology stocks, leading to varying performances in futures trading.
Currently, Dow Jones Industrial Average futures are up by 0.2%, building on substantial gains that saw the index soar over 600 points to achieve a record closing level. Conversely, futures for the benchmark S&P 500 index are down 0.1%, while those tethered to the tech-heavy Nasdaq have experienced a more notable decline of 0.5%. The yield on the 10-year Treasury note has also seen an uptick to 4.18%, slightly up from 4.14% at yesterday’s close, following its dip to 4.10% earlier that day after the Federal Reserve’s latest interest rate adjustments. In commodities, gold futures are up 1.2%, pricing at $4,365 per ounce, edging closer to the record high set in mid-October, while Bitcoin remains steady around $92,000.
In individual company news, shares of Broadcom have sharply declined, despite the chip manufacturer exceeding quarterly earnings expectations. Broader skepticism regarding the AI trade seems to have prompted a sell-off, with Broadcom stock witnessing a drop of more than 6% in early premarket trading after initial gains in extended trading following its earnings report.
The tech sector is generally under a significant amount of pressure, with Oracle’s stock down around 1% prior to market opening, compounding losses from a previous 11% drop triggered by disappointing sales figures and concerns over its customer base concentration and financing plans for AI-related projects. Several other significant players in the AI hardware market, such as Micron Technology and Advanced Micro Devices, are also facing declines.
On the regulatory front, President Trump has enacted a series of executive orders aimed at establishing a standardized approach to artificial intelligence regulation across the states. The new order addresses issues arising from disparate state regulations, describing them as a patchwork that complicates compliance. It instructs the Attorney General to form a task force to challenge any state regulations deemed overly burdensome until a federal standard can be established by Congress.
In contrast to the overall market pressures, Lululemon has performed exceptionally well, with its stock surging after the athletic apparel company reported strong quarterly financial results. It posted revenues of $2.57 billion and earnings per share of $2.59, both surpassing analyst expectations. The company has also revealed a $1 billion increase to its stock buyback plan and outlined a CEO succession strategy as current CEO Calvin McDonald prepares to step down at the end of January. Interim leadership arrangements have been discussed, with the current CFO and Chief Commercial Officer set to assume co-CEO roles if a successor is not appointed before McDonald’s departure. Following these announcements, Lululemon shares jumped 10% in premarket trading, recovering some ground after losing significant value earlier in the year.
