U.S. stock futures mixed as chip stocks extend losses

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U.S. stock futures mixed

Highlights

Nasdaq futures fall 0.59%, and Dow futures gain 0.18%.
Weak bank earnings pressure stocks.
Korean chip sell-off hits tech shares.

Nasdaq-100 futures fell 0.59%, to 30,716.25, while S&P 500 futures slipped 0.11%, to 7,849.00. Dow Jones futures gained 0.18%, to 52,205.00. The divergence reflected weakness in semiconductor shares and uneven early bank results, CNBC reports.

Bank earnings provide an uneven start

JPMorgan Chase shares declined more than 2% in premarket trading after the bank reported third-quarter revenue below expectations. Wells Fargo also fell approximately 2% following weaker-than-anticipated results, putting pressure on financial stocks as investors assessed the health of lending and consumer activity.

Goldman Sachs and Citigroup were also scheduled to report Tuesday, making the session an important early test for the broader earnings season. Analysts expect S&P 500 companies to deliver nearly 30% year-over-year profit growth, according to FactSet, leaving little room for disappointing results.

UnitedHealth provided a contrast, with shares gaining about 1% after its quarterly results exceeded analysts' estimates. The mixed reactions suggested investors were responding to company-specific earnings rather than moving uniformly across sectors.

South Korean sell-off hits U.S. chipmakers

Memory-chip stocks faced renewed selling after South Korea's Kospi index dropped 5.5%, reaching its lowest level since July 31. Concerns about elevated valuations and increasing Chinese competition contributed to the decline.

Chinese memory manufacturer CXMT announced plans to introduce a more powerful chip by year-end, raising questions about future competition in a market dominated by established suppliers.

SK Hynix and Western Digital fell around 8% each in early trading, while Micron Technology, Seagate Technology, and Sandisk declined more than 3%. The losses extended Monday's weakness, when falling memory shares pulled the Nasdaq Composite and S&P 500 lower despite a gain of more than 195 points in the Dow Jones.

Inflation data could determine market direction

Investors will also assess existing home sales figures and remarks from Federal Reserve officials Tom Barkin and Susan Collins. September inflation data, due later this week, could influence expectations for interest rates after Treasury yields recently reached multidecade highs.

The bond market was closed Monday for Indigenous Peoples' Day, making the return of Treasury trading another factor for equities. Higher yields could weigh particularly heavily on technology shares, whose valuations depend partly on expectations for future earnings.

The contrast between rising Dow futures and falling Nasdaq futures shows how uneven market sentiment has become. Strong profit expectations are supporting the broader earnings outlook, but disappointing bank results and concerns about memory-chip supply are testing investors' willingness to maintain exposure to expensive stocks.

Earlier, we reported that Asian tech shares fall sharply as doubts grow over AI profits.

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