Pre-Market Update: Nasdaq Futures Slide as Chip Stocks Sell Off Before June Jobs Report

TLDR

• Nasdaq 100 futures fell 0.5% while Dow futures edged slightly higher ahead of the June jobs report
• A chip stock sell-off led by South Korean memory makers SK Hynix and Samsung dragged the Kospi index down 7.9%
• The June jobs report is expected to show 115,000 jobs added, with unemployment steady at 4.3%
• Fed Chair Kevin Warsh declined to signal a rate hike, urging markets to focus on data instead
• Meta’s reported plan to sell excess cloud computing power raised questions about Big Tech AI spending

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US stock futures were mixed in early trading Thursday as investors waited for the June jobs report, due at 8:30 a.m. ET.

Nasdaq 100 futures dropped 0.5%. S&P 500 futures fell 0.1%. Dow Jones futures edged up less than 0.1%.

Chip Stocks Under Pressure

The tech sector remained under pressure following a 6.3% drop in the PHLX Semiconductor Index on Wednesday.

The sell-off continued overseas. South Korea’s Kospi index fell 7.9% on Thursday. Memory chipmakers SK Hynix and Samsung Electronics dropped over 14% and 9% respectively.

Both companies had recently announced large AI investment plans.

A report that Meta Platforms is building a cloud business to sell excess computing power to outside customers added to concerns. Investors questioned whether Big Tech has overspent on AI infrastructure.

Despite the tech weakness, the equal-weighted S&P 500 hit a new record on Wednesday. Deutsche Bank analyst Henry Allen noted that performance “hasn’t been so bad if you look beyond the tech slump.”

The 10-year Treasury yield stood at 4.495% early Thursday, ticking up slightly from the prior day.

All Eyes on the Jobs Report

Federal Reserve Chair Kevin Warsh spoke Wednesday at a central banking forum in Portugal. He declined to say whether the Fed would consider a rate hike later this month.

Warsh urged markets to look at economic data rather than the Fed for signals on interest rates.

Economists polled by the Wall Street Journal forecast 115,000 jobs were added in June. The unemployment rate is expected to hold at 4.3%.

Analysts warned the figure could be distorted by short-term hiring tied to the soccer World Cup.

Any sign of a strong labor market could raise expectations for a rate hike this year.

Oil prices dipped after Qatar, acting as mediator, said US-Iran talks this week were positive. No deal was reached, but the tone was described as constructive.

Gold rose following Warsh’s remarks. Bitcoin recovered after an earlier dip tied to the Fed comments.

Markets are now waiting to see if the jobs data shifts expectations for the Fed’s next move on rates.