US equity futures showed mixed movement on Tuesday, October 20, as fresh selling pressure in artificial intelligence shares cut short the previous day’s rebound. Ahead of the opening bell, NASDAQ futures dropped while oil prices surpassed USD 110 per barrel.
Despite climbing energy costs, investors also piled into US Treasury bonds. Market participants turned their focus toward upcoming technology earnings, interest rates, and the future trajectory of corporate spending on AI infrastructure.
NASDAQ Futures Fall After Monday’s Technology Rebound
In early trading, NASDAQ 100 futures slid roughly 0.3%, while S&P 500 futures remained largely flat. Meanwhile, Dow Jones Industrial Average futures ticked up by about 0.2%. These moves came on the heels of Monday’s tech-led rally, during which the NASDAQ Composite gained 1.1% and the S&P 500 climbed 0.4%.
Conversely, the Dow dipped 0.1% on Monday. NVIDIA rose 1.4%, Tesla gained 3.8%, and Alphabet ticked up roughly 1% following a difficult week for semiconductor producers and companies tied to AI infrastructure.
Selling pressure resurfaced across multiple chip stocks prior to Tuesday’s open. Micron retreated more than 2% in premarket action, and both Intel and Qualcomm experienced declines. AI cloud provider CoreWeave dropped about 3%, following a weekly loss of over 25%. Investors continue to scrutinize how corporations are financing new data centers and the timeline for these investments to start producing returns.
Elice IPO Decline Adds Pressure to AI Stocks
In Seoul, South Korean AI services firm Elice tumbled approximately 32% during its debut trading session. The stock finished at 60,500 won, falling short of its 90,500 won IPO price. The company generated 201.1 billion won through the offering, intending to allocate a large portion of the capital toward data centers and related infrastructure. Elice posted first-half revenue of 34 billion won alongside an operating profit of 10 billion won.
Across the region, South Korea’s Kospi dropped 3.73% and Japan’s Nikkei 225 fell 1.3%. Samsung Electronics and SK Hynix both retreated as regional semiconductor shares faced renewed headwinds. European tech stocks also slid, with ASML and ASMI among the names trading lower.
ABB presented a clear divergence between underlying business demand and stock performance. The Swiss engineering enterprise posted third-quarter orders totaling USD 12.06 billion, marking a 40% year-over-year increase, while revenue grew 14% to USD 9.7 billion.
Chief Executive Morten Wierod remarked, “Most notably so in the data center segment where we saw a triple-digit increase.” Even so, shares of ABB dropped over 6% during Tuesday’s session.
Oil Tops USD 110 as Treasury Yields Decline
Brent crude pushed past USD 110 a barrel to hit a five-month high. Traders kept a close eye on potential threats to Middle Eastern oil supplies after Yemen’s Iran-aligned Houthi faction claimed responsibility for attacks on Saudi energy infrastructure and other sites. The ongoing threat of supply disruptions kept crude prices elevated.
US government bonds advanced even in the face of rising crude prices. The yield on the benchmark 10-year Treasury note dipped roughly two basis points to hover around 5.12% (note that bond prices and yields move inversely). Simultaneously, the US dollar weakened against a basket of major global currencies.
European equities remained under pressure, with the Stoxx 600 retreating approximately 0.6%. French government debt also drew renewed scrutiny amid domestic protests and anxieties surrounding public finances. The dip in US Treasury yields stood in contrast to ongoing investor fears that rising fuel expenses could stoke inflation.
Earnings and Housing Data Remain in Focus
Market participants readied themselves for quarterly reports from Netflix and United Airlines on Tuesday, alongside scheduled figures from General Motors. Meta Platforms and Tesla were slated to release their earnings later in the week, offering fresh data points regarding corporate spending, revenue, and consumer demand.
Heavy corporate investors in AI are confronting stricter evaluations regarding their capital-raising strategies. Ninghui Liu, head of investment strategy and research for Asia-Pacific at State Street Investment Management, informed Reuters: “What they’re questioning is whether every dollar of AI capex earns more than it costs to finance.”
The Tuesday economic docket featured releases on US housing starts and pending home sales. These reports offered another gauge of economic health as investors grapple with elevated borrowing costs. With crude oil, technology equities, and bond yields pulling in different directions, traders stood by for the upcoming wave of macroeconomic reports and corporate earnings.
Also Read: US Stock Market Rallies as NASDAQ Futures Rise on AI Stock Recovery
