US STOCKS-S&P 500 futures steady after midterm rally; Nasdaq lags on chip weakness

​Nasdaq futures dropped on Thursday as chip and data center-related ‌stocks ​remained under pressure, while S&P 500 contracts were little changed after a surge in the last session following the Democrats' sweeping midterm election victory.

Qualcomm dropped 10.1% in premarket trading after the chipmaker fell short of Wall Street estimates for fourth-quarter smartphone chip sales on ‌sluggish demand and declining Apple-related revenue. Broader chip stocks extended losses after last session's fall, with Nvidia down 0.4%, Marvell Technology off 2.5% and Intel sliding 1.7%.

Chip stocks, along with companies linked to the AI infrastructure buildout, were down once again following the Democrats' election victory including in some key data-center states, where public opposition to the industry's rapid expansion has been growing. "Data center ‌pauses will slow the pace of buildout into 2028 with ~30% of expected 2028 additions now at risk of being impacted," UBS strategists said in a note.

"The slowdown ‌is a negative for Semis and AI infrastructure, but a lot is already priced into Semis with valuations nearing multi-year lows." Data center operators IREN, Hut 8, Applied Digital and Core Scientific fell between 0.3% and 1.3%. Neoclouds CoreWeave and Nebius Group fell 1.8% and 2.5%, respectively.

Utilities and equipment suppliers exposed to the data center boom, including GE Vernova and Constellation Energy , were also trading lower. AI server makers Dell and HPE were down ⁠about 2% each. Most ​large-cap tech stocks meanwhile built on their ⁠gains from the last session as a slower AI buildout was seen as helping them.

Amazon.com, Meta Platforms and Alphabet were up around 0.5% each. Elon Musk-led SpaceX and Tesla were down over 1% each, extending losses. Musk ⁠spent nearly half a billion dollars backing Republican candidates, including efforts to keep Republicans in control in Texas, the home state of both companies. At 5:04 a.m. ET, Dow E-minis were up 258 points, ​or 0.48%, and S&P 500 E-minis were up 0.5 points, or 0.01%. Nasdaq 100 E-minis were down 181 points, or 0.63%.

The S&P 500 clocked its biggest ⁠one-day percentage gain in three months on Wednesday as the easing political uncertainty boosted risk appetite. Some analysts said that a divided government in Washington could lead to fewer sharp legislative changes and may even make it harder to ⁠agree ​on fiscal spending, given the US's deteriorating fiscal picture.

A sharp drop in oil prices in the previous session had also boosted risk sentiment. Brent crude futures were up over 1% on Thursday after dropping more than 8% on Wednesday. Crude oil prices have been in focus this year as concerns about supply disruptions from the Middle East conflict ⁠have driven sharp swings and stoked inflation worries.

Central banks around the world have acknowledged inflation remains elevated, with the US Federal Reserve even hiking its interest rates in September ⁠and markets pricing in another hike next month. At ⁠least three Fed officials including Richmond Fed President Thomas Barkin are slated to speak throughout the day, leading up to a crucial October jobs report due on Friday.

Among other stocks, credit-scoring firm Fair Isaac dropped 9% after missing fourth-quarter profit estimates, while Snapchat owner ‌Snap slid 10.1% after missing third-quarter ‌revenue estimates. AppLovin jumped 16.4% after the marketing platform beat third quarter profit estimates.