Wall Street futures traded mixed on Friday, with the Nasdaq leading declines as semiconductor stocks gave back some of their recent gains. The pullback followed a strong rally driven by Micron Technology's upbeat quarterly forecast, but profit-taking and renewed concerns about AI valuations and Federal Reserve rate risks dampened sentiment.
Futures Overview
S&P 500 futures slipped 0.16%, while Nasdaq 100 futures fell 0.66%. In contrast, Dow Jones futures rose 92 points, or 0.18%, reflecting a rotation into industrials and defensive sectors. The mixed action follows a Thursday session where Big Tech losses offset gains in healthcare, materials, and industrials, leaving the S&P 500 nearly flat.
Micron Profit-Taking Hits Chip Sector
Micron Technology dropped 4.8% in premarket trading after surging more than 15% on Thursday following a strong quarterly forecast that briefly revived confidence in AI infrastructure spending. The reversal suggests investors are locking in profits after a massive run, rather than signaling a fundamental demand shift. The broader chip complex also weakened: Intel and AMD each fell over 3%, while Nvidia slipped 1.4%. Semiconductors have been among the biggest beneficiaries of the AI rally, making them particularly sensitive to valuation reassessments.
This profit-taking echoes patterns seen in recent weeks, as highlighted in our coverage of Memory Chip Stocks Plunge Up to 10% on AI Debt Fears and Rate Hike Bets.
AI Spending Doubts Resurface
The core concern is not whether AI demand exists—it clearly does—but how quickly massive spending on data centers, chips, and power infrastructure translates into sustainable profits for the companies funding it. Alphabet and Amazon have already faced pressure this week as traders scrutinized hyperscaler budgets. Apple added to the debate by raising prices on some products to offset higher memory and storage costs, highlighting the dual impact of the AI boom: chip demand boosts suppliers but also raises input costs for device makers.
These valuation worries are reminiscent of the Tech Rout Deepens: Asia Stocks Tumble, Nasdaq Futures Slide as Inflation Fears Persist earlier this month.
OpenAI IPO Delay Adds to Caution
Reports that OpenAI may delay its public listing until next year added to the cautious tone. Analysts noted that such a delay carries symbolic weight, as OpenAI helped ignite the current AI investment cycle. Meanwhile, SpaceX remained in focus after its recent market debut, with shares slipping 1.7% in choppy premarket trading. Investors are preparing for its fast-track addition to the Russell 1000, with Friday's index rebalancing expected to boost trading volumes across several large-cap names.
Fed Rate Risk Lingers
Macroeconomic pressures remain in the background. Traders are pricing in one 25-basis-point Fed rate increase and see a near 27% chance of another by year-end. New York Fed President John Williams said inflation should moderate this year but remains too high. The final June consumer sentiment reading is due later Friday, while next week's jobs report will be the next major test for markets.
For now, Wall Street is caught between two forces: AI earnings still look strong, but the price investors are willing to pay for them is being challenged again. The Russell index rebalancing and ongoing Fed uncertainty add to the uneven trading expected in the final session of the week.
This article is for informational purposes only and does not constitute financial advice.
