US stock futures were mixed on Thursday, with the Dow Jones Industrial Average pointing to a modest gain while technology-heavy indices struggled. The divergence reflects a shift in investor sentiment toward AI-related names, where strong earnings are no longer sufficient to justify stretched valuations.
Dow at Record, Tech Under Pressure
The Dow closed at a record 54,349.12 on Wednesday, up 0.5%, while the S&P 500 slipped 0.2% and the Nasdaq fell 0.8%. This pattern continued in pre-market trading, with Dow futures adding 123 points (0.3%), S&P 500 futures little changed, and Nasdaq 100 futures dropping 133 points (0.5%).
The broader market trend remains positive, with major indices posting strong weekly gains after robust earnings from several large companies. However, the latest price action suggests investors are becoming more selective, rewarding companies with visible cash flow while trimming exposure to AI-linked stocks where expectations have run ahead of near-term profits.
Memory Stocks Slide Despite Strong Results
Western Digital reported fiscal fourth-quarter revenue of $3.75 billion, up 44% year-over-year, and adjusted earnings of $3.56 per share, both exceeding analyst estimates. The company also guided first-quarter revenue to $4 billion–$4.2 billion. Despite the beat, shares fell sharply as investors took profits after a roughly 200% rally this year.
SanDisk saw revenue surge to $8.97 billion with net income of $6.9 billion. However, its first-quarter sales forecast of $10.3 billion–$10.8 billion came in at the lower end of consensus, disappointing traders who had priced in a stronger outlook. After a 400% surge in 2026, merely solid guidance was not enough to protect the stock.
Chip Complex Weakness Spreads
The sell-off in memory names dragged other semiconductor stocks lower before the bell. Micron fell about 3.5%, while AMD, Marvell Technology, and Intel each declined more than 1%. This follows steep losses in Samsung Electronics and SK Hynix in Seoul, highlighting the global nature of the pullback.
Memory and storage stocks have become key proxies for AI infrastructure demand. Their earnings still show rapid growth, but investors are questioning how much of that growth is already reflected in valuations. Megacap technology was steadier, with Apple and Alphabet gaining, suggesting the pressure is concentrated in the most extended hardware trades rather than the entire sector.
SpaceX Lock-Up Expiry Adds Uncertainty
SpaceX shares rose modestly in pre-market trading, but the first post-IPO lock-up expiry could prove more significant. As many as 912 million shares become eligible for sale on Thursday, potentially more than doubling the public float. Further staggered releases could free another 12.9 billion shares by mid-2027.
Employees and early investors hold large paper gains even after the stock fell 49% from its June peak, creating an incentive to diversify. The key question is not whether every eligible holder sells, but whether a few prominent early backers reduce their stakes. Heavy insider selling could reinforce concerns about spending and add volatility after this week's post-earnings decline.
Macro Factors: Oil, Fed, and Jobs Data
Brent crude traded near $80 and WTI around $75 as investors assessed an emerging Iran-Oman framework for navigation through the Strait of Hormuz. The market remains skeptical because Gulf crude and condensate exports were still about 40% below pre-war levels in July, while reported attacks on Saudi tankers revived supply concerns.
Lower oil would ease inflation pressure, but the Federal Reserve's September decision remains finely balanced after Chair Kevin Warsh offered little guidance. July private payrolls rose by only 44,000, sharpening attention on Thursday's jobless-claims report and Friday's nonfarm payrolls.
For more on market movements, see Dow futures climb on Middle East hopes and Palantir earnings reignite AI rally.
This article is for informational purposes only and does not constitute financial advice.
