US stock futures pointed to a weaker open on Tuesday, 28 July, as global semiconductor stocks came under renewed selling pressure amid mounting investor concerns over the returns on billions of dollars of artificial intelligence (AI) spending. Sentiment also remained cautious ahead of a busy week of central bank policy decisions.
Nasdaq-100 futures fell 0.9%, while S&P 500 futures slipped 0.1%. In contrast, Dow Jones Industrial Average futures rose 123 points, or 0.2%.
Among individual stocks, Micron Technology declined 4.5%, while Marvell Technology and Advanced Micro Devices (AMD) each fell around 3% in pre-market trading.
The weakness in semiconductor stocks followed a sharp sell-off in South Korea, where SK Hynix tumbled 10% after its American depositary receipts (ADRs) slumped to a record low in New York and fell below their initial US listing price during Monday’s session.
Samsung Electronics also dropped 9.15%. The sell-off was triggered by concerns over circular funding practices and intensifying competition from Chinese chipmakers.
The decline has raised the stakes ahead of a packed week of market-moving events, including policy decisions from the Federal Reserve, Bank of Japan, and Bank of England, along with earnings from several megacap technology companies, including Amazon, Meta Platforms and Microsoft.
Investors are looking for evidence that the world’s biggest AI spenders can generate meaningful returns on the billions of dollars they have committed to the technology.
“The recent selloff reflects growing concerns around the AI trade. Investors are questioning whether massive spending on artificial intelligence will continue at the current pace, while rising competition from Chinese chipmakers is adding to the uncertainty,” said domestic brokerage firm Vested Finance.
In the Middle East, geopolitical tensions eased after the United States paused its daily strikes on Iran. President Donald Trump said there was a “good chance” of reaching a deal with Tehran and reportedly decided to suspend the strikes to give diplomatic negotiations another opportunity.
Meanwhile, the US Federal Reserve is widely expected to keep interest rates unchanged at this week’s policy meeting. However, markets are currently pricing in roughly a 56% probability of a rate cut in September.
Brent slips below $85 as diplomatic hopes outweigh supply disruption fears
Crude oil prices remained under pressure on Tuesday, with Brent crude futures slipping below $85 per barrel, their lowest level in more than a week, while WTI crude futures also fell below $80 per barrel.
However, geopolitical tensions remain elevated, with both the US and Iran reportedly warning that hostilities could resume if the ongoing talks collapse.
Brent crude had briefly surged to $102 per barrel last week—its highest level since May and nearly $30 above the most actively traded Brent contract earlier this month.
The ability of oil tankers to safely transit the Strait of Hormuz has remained the key concern for energy markets since the US and Israel launched military strikes against Iran in late February.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
About The Author
