Broadcom selloff drags Nasdaq futures lower

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Alena Volkova

6 hours ago

Broadcom selloff drags Nasdaq futures lower — Nasdaq futures fall on Broadcom and Iran

Nasdaq futures fell sharply Thursday after Broadcom’s earnings report failed to satisfy investors looking for a stronger signal from the artificial intelligence trade. The decline came as markets were already under pressure from renewed U.S.-Iran tensions, higher oil prices, and a break in the S&P 500’s nine-day winning streak.

Highlights

Nasdaq 100 futures fell about 1.3% as Broadcom dragged down AI-linked stocks.
Broadcom reported strong results, but investors were disappointed by the AI outlook.
The S&P 500 ended a nine-day winning streak Wednesday.
U.S.-Iran tensions and oil prices remain key risks for equities.

AI trade faces a high bar

Futures tied to the Nasdaq 100 dropped about 1.2% to 1.3%, while S&P 500 futures fell roughly 0.5%. Dow futures rose about 0.5%, leaving the market split between tech weakness and relative strength in blue-chip stocks.

Broadcom was the main drag. Its shares fell more than 12% in premarket trading after investors judged its AI chip outlook as insufficient following a powerful run in the stock. The company reported record second-quarter revenue of $22.19 billion, up 48% from a year earlier, and said AI semiconductor revenue rose 143% to $10.8 billion, but the market focused on whether future growth can keep exceeding already elevated expectations.

CrowdStrike also weakened after reporting results, adding to pressure on high-valuation technology stocks. The cybersecurity company’s shares fell about 10% to 11% even after revenue and earnings beat forecasts, reflecting investor caution toward richly priced software names.

Iran risk returns to Wall Street

The technology selloff followed a weaker session on Wednesday, when the S&P 500 fell 0.7%, the Nasdaq Composite lost 0.9%, and the Dow dropped 1.2% to 50,687.07. The S&P 500’s decline ended a nine-day winning streak as investors reacted to rising U.S.-Iran tensions and a jump in oil prices.

The conflict has become a larger market risk after renewed strikes in the Gulf. Oil rose earlier this week as U.S. forces responded to attempted Iranian attacks near the Strait of Hormuz, and Iran targeted regional sites, raising concerns that the war could keep energy prices elevated.

Political pressure on President Donald Trump also intensified. The House passed a war powers resolution by 215-208 aimed at limiting his ability to continue military action against Iran without congressional approval, with four Republicans joining Democrats.

Markets now look to labor data

Thursday’s trading will also be shaped by labor-market reports ahead of Friday’s May jobs data. Investors are watching weekly jobless claims, productivity and unit labor cost readings for clues on whether the economy can keep supporting earnings without adding inflation pressure.

The market’s next test is whether the AI rally can survive a more demanding earnings bar. Broadcom’s selloff shows that strong numbers may no longer be enough if guidance does not exceed aggressive expectations.

In addition, we wrote that U.S. stocks edged higher as the AI rally meets Iran risk.

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