U.S. stock futures faced a challenging morning on Wednesday after a tumultuous trading session, which resulted in Wall Street equity markets closing significantly lower. The Dow Jones Industrial Average futures remained marginally above the zero line, while S&P 500 futures slipped by 0.1%. Contracts for the tech-heavy Nasdaq 100 experienced a 0.2% decline, largely driven by a disappointing performance from AI chipmaker AMD, whose earnings exceeded estimates yet failed to impress investors.
The preceding day’s regular trading saw the Nasdaq Composite tumble over 2%, underlining a widespread selloff in technology stocks. Notably, Palantir’s shares dropped nearly 8%, despite surpassing third-quarter expectations. The decline raised concerns among investors regarding the sustainability of the AI-fueled market rally, igniting fears of a potential bubble. Prominent investor Michael Burry has reportedly taken action against both Palantir and Nvidia, further unsettling market participants. AMD’s lackluster earnings have compounded these anxieties.
Wednesday’s earnings calendar included major companies such as McDonald’s, Qualcomm, Robinhood, and Toyota, drawing attention from traders. Economic data released during the day, including the ADP private payrolls report, was expected to provide insights into the labor market, along with updates on mortgage applications and ISM services activity. Meanwhile, the ongoing government shutdown is hindering the release of economic data, marking the longest such cessation in U.S. history. In light of this situation, the Trump administration has warned travelers of potential “mass chaos,” given the likelihood of airport closures.
Adding to the day’s tension, President Trump’s tariffs faced a critical examination from the Supreme Court, which was set to hear arguments about his authority to impose these tariffs. The outcome of this case could have profound implications for the global economy.
In premarket trading, notable stock movements included Pinterest, which saw a staggering 17% drop after revealing that tariff-related pressures and challenges in finding growth avenues negatively impacted its forecast. Similarly, SMCI experienced a 9% decline following its third-quarter earnings report that failed to meet Wall Street expectations. In contrast, Lumentum Holdings Inc. enjoyed a 15% increase as it reported quarterly earnings that surpassed estimates.
In a separate development, Novo Nordisk revised its full-year profit and sales forecasts downward amid stiff competition in the weight-loss drug market. However, shares of the Danish drugmaker saw a nearly 3% rise in premarket trading as investors absorbed the implications of its quarterly earnings release.
Asian markets mirrored the downward trend established by U.S. markets, with significant falls prompted by the tech sell-off. The appetite for high AI expenditures appeared to be waning, contributing to the fears of over-inflated valuations. South Korea’s Kospi experienced a drop of over 6% initially, before stabilizing at a 3% decline. Japan’s Nikkei 225 also suffered, closing down 2.8%, while Hong Kong’s Hang Seng index slipped by 0.5%.
On the commodities front, gold prices struggled around the $4,000 level after a record-setting run, facing pressure from a robust dollar and the Federal Reserve’s rate cuts, which have diminished demand for safe-haven assets.
