U.S. stock futures decline after megacap tech losses push Nasdaq and S&P 500 lower amid AI spending concerns and geopolitical risks.
U.S. stock futures traded lower Tuesday following a mixed session on Monday, with the Nasdaq and S&P 500 dragged down by a sharp sell-off in megacap tech stocks. The Dow Jones Industrial Average bucked the trend, closing up 0.29% at 51,712, while the Russell 2000 rose 0.88% to 3,005. The Nasdaq fell 1.33% to 26,166, and the S&P 500 declined 0.37% to 7,472.
Investors cited rising unease over the infrastructure costs required to scale AI, alongside persistent geopolitical tensions. Treasury yields surged Monday, with Bank of America forecasting 75 basis points of Federal Reserve rate hikes ahead. End-of-quarter reallocations and earnings blackout periods may add to volatility this week.
Corporate buybacks remain on hold, limiting support for equities as hedge funds and mutual funds adjust positions. The tech-heavy Nasdaq underperformed, reflecting broader concerns about valuation pressures in the sector.