US STOCKS-Nasdaq futures slip on chip weakness; S&P 500 holds gains

Nasdaq futures dropped on Thursday as chip ‌and ​data center-related stocks remained under pressure, while S&P 500 contracts extended gains slightly from the last session following the Democrats' sweeping midterm election victory. Qualcomm dropped 9.6% 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 semiconductor stocks extended losses after Wednesday's fall, with Nvidia down 0.8%, Marvell Technology off 3.4% and Intel slipping 2%. Chip stocks, along with companies linked to the AI infrastructure buildout, slipped further 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, and Applied Digital fell between 1.1% and 2.7%. Neoclouds CoreWeave and Nebius Group fell 3% each. Utilities and equipment suppliers exposed to the data center boom, including GE Vernova and Constellation Energy , were also trading lower. AI server maker Dell was down 2.9%.

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 above 1%.

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 them in control in Texas, the home state of both companies. At 7:04 a.m. ET, Dow E-minis were up 330 points, or 0.62%, and S&P 500 E-minis were ​up 15.5 points, or 0.2%. Nasdaq 100 E-minis were down 145.5 points, or 0.51%.

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 supported the 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 8.5% after missing fourth-quarter profit estimates, while Snapchat owner Snap slid 9% ‌after missing third-quarter revenue estimates. AppLovin ‌jumped 20% after the marketing platform beat third-quarter profit estimates.