Nasdaq, S&P 500, Dow Futures Slip As Chip Stocks Pull Back: LULU, NFLX, KEEL, MRLN Stocks In Focus

• The Dow, S&P 500, and Nasdaq 100 futures all declined at the time of writing.  
• Uncertainty over the war in the Middle East continued to weigh on markets after Hezbollah rejected the ceasefire proposed in Lebanon.
• Markets will be focused on May’s nonfarm payrolls report due on Friday.

U.S. stock futures edged lower in the overnight session on Thursday as AI-linked semiconductor companies declined sharply following a post-earnings slump in Broadcom Inc. (AVGO).

Meanwhile, uncertainty over the war between the U.S. and Iran continued to weigh on markets after Tehran-backed Hezbollah rejected the ceasefire proposed in Lebanon.

The Dow futures declined by 0.09%, while the S&P 500 futures declined 0.62%, and the Nasdaq 100 futures traded 1.28% lower as of 9.23 p.m ET.  

Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY), the Invesco QQQ Trust (QQQ) and the SPDR Dow Jones Industrial Average ETF Trust (DIA) were all trading lower, with retail sentiment in the ‘bullish’ territory for SPY, ‘neutral’ territory for QQQ and in the ‘bearish’ territory for DIA.

Meanwhile, the iShares 20+ Year Treasury Bond ETF (TLT) was up 0.02% amid ‘bearish’ sentiment at the time of writing.

How Did US Markets Fare On Thursday?

The Dow Jones Industrial Average surged to a fresh all-time high on Thursday, jumping about 874 points or 1.73% at close. The S&P 500 also closed 0.41% higher. However, the Nasdaq Composite lost 0.09% at close as investors rotated out of chip stocks.

US Market Drivers

U.S. stock futures edged lower after a revenue miss and weaker-than-expected outlook from Broadcom Inc. (AVGO) sparked concerns that the semiconductor sector's powerful rally may be losing steam. AVGO shares fell more than 12% on Thursday and continued to decline in overnight trading.

Meanwhile, Taiwan Semiconductor Manufacturing (TSM) CEO C.C. Wei said AI chip demand is expected to outstrip supply for years despite aggressive capacity expansion, underscoring ongoing supply constraints as hyperscalers and chipmakers continue to pour billions into AI infrastructure.

The weakness spread across the semiconductor sector, with shares of Micron Technology (MU) and Advanced Micro Devices (AMD) slipping into the red, while the iShares Semiconductor ETF (SOXX) dropped more than 2% at close on Thursday.

At the same time, investors appeared to rotate more heavily into non-technology stocks. UnitedHealth Group (UNH) gained more than 5%, while Goldman Sachs Group, Inc. (GS), American Express Co. (AXP) and JPMorgan Chase & Co. also posted gains.

“After an astonishing earnings season, the AI trade is still alive and well, but this rally is getting tired after an incredible more than two-month surge,” Dennis Follmer, chief investment officer at Montis Financial, reportedly told CNBC.

The moves appeared to “suggest the early innings of a rotation and it’s also a reminder that not all AI stocks are the same and there are different expectations built into each stock,” he added.

Geopolitical concerns also weighed on sentiment after Hezbollah rejected a proposed ceasefire arrangement in Lebanon. The development raised fresh uncertainty in the Middle East despite recent efforts by Israel, Lebanon, and the United States to reinforce a fragile truce.

IG market analyst Tony Sycamore reportedly said in a note that any optimism about a peace deal remained “​heavily clouded by a ​tangled web of headlines ⁠and counter-headlines."

On the economic front, investors are focused on May’s nonfarm payrolls report, which will provide key insights into job growth, unemployment, and wage trends.

Trending Stocks To Watch

Lululemon Athletica Inc. (LULU): The athletic apparel retailer’s shares declined more than 11% in after-hours trading following its disappointing first-quarter results that showed a sharp decline in North American performance and a significant downward revision to its full-year 2026 guidance.

Netflix Inc. (NFLX): The streaming giant jumped onto the retail radar as investors awaited key announcements and updates from its 2026 Annual Meeting of Stockholders that took place on Thursday.

Keel Infrastructure Corp. (KEEL): Shares of the digital and energy infrastructure company declined nearly 9% in overnight trading after the company announced plans to offer $350 million of convertible senior notes.

Merlin Inc. (MRLN): The small-cap aerospace and defense company’s stock surged more than 31% overnight after it announced the successful completion of the critical design review for its C-130J autonomy program with the U.S. Special Operations Command.

Global Market Trends

Oil futures were mixed in the overnight session amid uncertainties in the Middle East conflict. Brent crude futures expiring in August were up by 0.12%, trading at around $95.04 a barrel at the time of writing, while WTI crude futures expiring in July were about 0.14% lower, trading around $92.91 a barrel.

Meanwhile, yields on the 10-year Treasury were at 4.471%, while gold prices fell to around $4,457.48 per ounce.

Asian markets trailed U.S. stocks, edging lower on Friday, with the KOSPI, Nikkei 225, and the SSE Composite index all declining at the open. Australian stocks were also trading lower at the time of writing.

For updates and corrections, email newsroom[at]stocktwits[dot]com.