Nasdaq Futures Drop Amid Chip Stock Selloff; FOMC Meeting Looms
Nasdaq futures fell sharply as chip stocks continued to decline amid growing concerns over the sustainability of AI spending and rising competition from China. The selloff spread globally, with South Korea's Kospi index dropping more than 10% and Japan's Nikkei down nearly 4%. In pre-market trading in the U.S., Sandisk (SNDK) fell over -11%, while Advanced Micro Devices (AMD) dropped more than -5%. The decline was fueled by fears of intensifying competition from Chinese chipmakers, including a report that a state-backed firm began mass-producing advanced lithography machines. Additionally, Nvidia's $750 billion in AI infrastructure deals raised concerns about circular financing and the sector’s ability to generate returns. Investors are also watching for developments on U.S.-Iran tensions as well as economic data ahead of the Federal Reserve's two-day policy meeting later this week. The Fed is expected to keep interest rates unchanged, with inflation cooling but price risks rising due to geopolitical tensions and AI-driven demand surges. Meanwhile, some sectors saw gains—software stocks like Atlassian (TEAM) rose over 10%, while Forte Biosciences surged nearly 40% after a takeover offer.
Tickers: $AMD $MU $NVDA $SNDK $TEAM $WDAY
Topics: AI infrastructure chip stocks global markets Nasdaq futures