U.S. Stocks May See Early Slump Amid Extended Tech Sell-Off

The major U.S. index futures are currently pointing to a sharply lower open on Friday, with stocks likely to see further downside following the pullback seen in the previous session.

Continued weakness among technology stocks is likely to weigh on Wall Street, as reflected by the 2.7 percent plunge by the tech-heavy Nasdaq 100 futures.

Intel (INTC) may help lead the tech sector lower after the chipmaker reported better than expected third quarter earnings but provided disappointing fourth quarter guidance. Shares of Intel are plummeting by more than 25 percent in pre-market trading.

Shares of Amazon (AMZN) are also seeing substantial pre-market weakness, with the online retail giant plunging by nearly 8 percent.

The slump by Amazon comes after the company reported third quarter earnings and revenues that missed analyst estimates as well as negative free cash flow.

“The message from investors is becoming clearer: strong AI demand is no longer enough on its own,” said Daniela Hathorn, Senior Market Analyst at Capital.com. “Companies need to demonstrate that substantial capital expenditure is translating into sustainable revenue growth, margins and free cash flow.”

She added, “This could remain a significant headwind for the Nasdaq, particularly given the concentration of market gains in a handful of technology companies.”

Negative sentiment may also be generated in reaction to a significant rebound by the price of crude oil, with U.S. crude oil futures jumping by more than 2 percent.

Supply concerns due to the conflict in the Middle East are driving crude oil prices higher after a tanker transiting the Strait of Hormuz was attacked with two explosive devices attached to its hull by a small boat. It was not immediately clear who was behind the attack.

Additionally, according to reports by the Wall Street Journal and Axios, a senior commander has briefed President Donald Trump on potential military options for a possible resumption of major combat operations against Iran.

On the other hand, energy stocks are likely to benefit from the jump in crude oil prices, with Chevron (CVX) and Exxon Mobil (XOM) seeing notable pre-market strength after reporting skyrocketing third quarter profits.

After trending higher over the past few sessions, the major U.S. stock indexes moved back to the downside during trading on Thursday. The tech-heavy Nasdaq showed a particularly steep drop on the day.

The Nasdaq tumbled 365.13 points or 1.4 percent to 26,184.72, giving back ground after surging by 2.3 percent over the three previous sessions. The S&P 500 also dipped 23.59 points or 0.3 percent to 7,720.39, while the Dow fell 132.54 points or 0.3 percent to 52,342.56.

The sharp pullback by the Nasdaq came as technology stocks came under pressure as concerns about the artificial intelligence trade once again resurfaced on Wall Street.

Google parent Alphabet (GOOGL) led the way lower, plunging by 13.2 percent after reporting weaker-than-expected third quarter revenue as well as negative free cash flow.

“Alphabet’s accelerated cash burn might have been overlooked if the rest of its update had reassured investors that the money being spent is delivering, but shares in the company slid 13%, dragging down many of its tech heavy peers,” said Danni Hewson, head of financial analysis at AJ Bell.

Shares of Caterpillar (CAT) also moved sharply lower on the day, with the construction equipment maker tumbling by 9.6 percent even though the company reported better-than-expected third quarter earnings and revenue.

On the U.S. economic front, a closely watched report released by the Commerce Department showed consumer prices in the U.S. increased in line with economist estimates in the month of September.

The Commerce Department said its personal consumption expenditures (PCE) price index climbed by 0.5 percent in September after rising by 0.3 in August. The increase matched expectations.

The report also said the annual rate of growth by the PCE price index accelerated to 3.6 percent in September from 3.4 percent in August, while was also in line with estimates.

Excluding food and energy prices, the core PCE price index rose by 0.3 percent in September, matching an upwardly revised increase in August as well as expectations.

The annual rate of growth by the core PCE price index ticked up to 3.1 percent in September from 3.0 percent in August. The uptick also came in line with economist estimates.

Meanwhile, a separate Commerce Department report showed economic growth in the U.S. exceeded economist estimates in the third quarter of 2026.

Despite the pullback by the major averages, housing stocks moved sharply higher amid a decrease in treasury yields, with the Philadelphia Housing Sector Index spiking by 3.8 percent.

Substantial strength was also visible among pharmaceutical stocks, as reflected by the 3.4 percent surge by the NYSE Arca Pharmaceutical Index.

Eli Lilly (LLY) helped to lead the sector higher, soaring by 6.8 percent after reporting better than expected third quarter results.

Airline, healthcare and commercial real estate stocks also saw considerable strength, while gold stocks moved sharply lower amid a decrease by the price of the precious metal, dragging the NYSE Arca Gold Bugs Index down by 3.2 percent.

Software, computer hardware and semiconductor stocks also showed notable moves to the downside, contributing to the slump by the Nasdaq.

Commodity, Currency Markets

Crude oil futures are jumping $1.79 to $103.79 a barrel after sliding $0.78 to $102 a barrel on Thursday. Meanwhile, after falling $20.20 to $4,031.40 an ounce in the previous session, gold futures are tumbling $56.80 to $3,974.60 an ounce.

On the currency front, the U.S. dollar is trading at 157.20 yen versus the 157.69 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is unchanged compared to yesterday’s $1.1178.

Asia

Asian stocks ended mixed on Friday, with technology and semiconductor shares falling amid ongoing AI-related concerns.

There was a sell-off across the AI value chain after Google parent Alphabet burnt through cash last quarter, Amazon signaled higher capital expenditures next year atop an already huge amount in 2026, and Intel warned about a faltering PC market.

Adding to the risk-off tone, Binance, the world’s largest crypto exchange, has frozen digital assets worth around $3 billion (£2.24 billion) as it investigates a “potential security issue.”

The U.S. dollar fell along with Treasury yields in Asian trading, while gold extended losses to hover around $3,980 an ounce.

Brent crude futures jumped almost 2 percent toward $113 a barrel on signs the U.S. may resume military strikes against Iran.

According to reports by the Wall Street Journal and Axios, a senior commander has briefed President Donald Trump on potential military options for a possible resumption of major combat operations on Thursday.

China’s Shanghai Composite Index tumbled 1.4 percent to 3,599.02 as a global AI tech sell-off weighed on technology stocks.

Hong Kong’s Hang Seng Index surged 1.5 percent to 23,294.42, recovering losses from the previous session ahead of Global Financial Leaders Investment Summit opening next week.

Japanese markets slumped as a result of weakening AI sentiment and a stronger yen.

The Japanese currency extended gains against the dollar after the Bank of Japan kept interest rates unchanged as expected but upwardly revised its inflation forecast and indicated it remains prepared to tighten policy further if inflation risks intensify.

The Nikkei 225 Index plunged 2.1 percent to 63,290.11, while the broader Topix Index slumped 1 percent to 3,965.07. AI spending concerns weighed on the chip sector, with Advantest, Tokyo Electron and Kioxia Holdings falling 5-7 percent.

Seoul stocks tumbled as heavyweight chipmakers fell sharply amid concerns over returns on artificial intelligence investments. The Kospi Index plummeted 3.5 percent to 5,730.74. Samsung Electronics, SK Square and SK Hynix plunged 3-7 percent.

Australian markets shrugged off a global tech sell-off to end slightly higher, with retail and energy stocks leading the surge ahead of next week’s RBA policy meeting.

The benchmark S&P/ASX 200 Index edged up 0.2 percent to 8,908.10, while the broader All Ordinaries Index settled 0.1 percent higher at 9,025.40.

Grocer Coles plummeted 7.7 percent after the supermarket giant said heightened promotional activity from competitors hurt early second-quarter sales. Wesfarmers rallied 3.6 percent and JB Hi Fi surged 6.2 percent.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index climbed 0.6 percent to 13,797, extending gains for a third consecutive session to reach a two-week high.

Europe

European stocks have moved mostly lower on Friday after having closed at a seven-week high the previous day on the back of strong earnings and status quo interest rate decisions by the Federal Reserve and the European Central Bank.

Technology stocks are under selling pressure after Alphabet burnt through cash last quarter, Amazon signaled higher capital expenditures next year atop an already huge amount in 2026, and Intel warned about a faltering PC market.

Elevated oil prices and weak French GDP data also kept investors on edge. The French economy contracted unexpectedly in the third quarter on weak investment and exports, according to preliminary data from the statistical office INSEE.

Gross domestic product fell 0.1 percent sequentially after stagnating in the second quarter. Economists had forecast the economy to expand 0.1 percent. German preliminary Q3 GDP arrived at 0.2 percent, beating forecasts.

The German DAX Index is down by 0.9 percent and the French CAC 40 Index is down by 0.2 percent, although the U.K.’s FTSE 100 Index has bucked the downtrend and inched up by 0.1 percent.

AI spending concerns weighed on technology stocks, with Aixtron, Infineon Technologies and ST Microelectronics moved sharply lower.

Lender Credit Agricole has also shown a notable move to the downside despite reporting higher profit for the third quarter.

Meanwhile, British drugmaker AstraZeneca has rallied after its profit rose more than expected in the third quarter.

Oil & gas giant BP has also shown a strong move to the upside after profits surged last quarter to a new record.

France’s Sanofi has also surged after clocking stronger-than-expected third-quarter earnings and lifting its full-year outlook.

Capgemini has also advanced. The IT consulting group upgraded its 2026 financial targets after reporting a 12 percent increase in third quarter revenue.

Reinsurer SCOR have also moved sharply higher after reporting higher-than-expected third-quarter net income.

German sportswear maker Puma has also soared after its gross margins improved in the third quarter.

U.S. Economic News

MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of October at 9:45 am ET.

The Chicago business barometer is expected to pull back to 56.1 in October after spiking to 58.8 in September, although a reading above 50 would still indicate growth.

At 12 pm ET. San Francisco Federal Reserve President Mary Daly is due to deliver introductory remarks before the San Francisco Fed’s 2026 Economic Research Symposium.

St. Louis Federal Reserve President Alberto Musalem is scheduled to speak on the U.S. economy and monetary policy before a Shadow Open Market Committee meeting at 12:30 pm ET.