U.S. stock market futures dropped Tuesday morning as semiconductor stocks extended their recent decline and investors continued to grapple with inflation concerns, even as Treasury bond selling paused and oil prices pulled back.
In premarket trading, Nvidia shares fell 0.8% and appeared headed for a third consecutive day of losses as investors moved away from highly-valued chip stocks that have powered U.S. markets to new records this year.
Memory chip and data storage firms were hit particularly hard after recent weeks of gains. Micron Technology dropped 1.7%, Seagate Technology declined 2.9%, and Western Digital fell 3%.
Wall Street’s recent surge came to a halt Friday as turmoil in global bond markets sparked concerns that major central banks might tighten monetary policy, with Middle East tensions pushing oil prices higher and raising fears of persistent inflation.
Brent crude futures dropped approximately 1% but remained above $110 after U.S. President Donald Trump posted on social media Monday that he had postponed a planned military action against Iran, originally set for Tuesday, as negotiations continue.
The benchmark 10-year Treasury yield declined to 4.609% after reaching its highest point since February 2025 on Monday.
“Risk sentiment is mixed on Tuesday, as investors weigh up the costs of the war in the Middle East,” said Kathleen Brooks, research director at XTB.
“There is a sense of frustration that there has been no break in the impasse between the U.S. and Iran and no clear path to a deal to end the war.”
As of 7:23 a.m. ET, Dow E-minis dropped 101 points or 0.2%, S&P 500 E-minis declined 27.75 points or 0.37%, and Nasdaq 100 E-minis were down 184 points or 0.63%.
The technology-focused Nasdaq posted the biggest losses on Wall Street Monday as climbing yields put pressure on tech and other growth-oriented stocks. Rising yields typically hurt these companies since their valuations depend heavily on expected future earnings.
Tuesday saw cloud company Akamai Technologies drop 3.8% following its announcement of a $2.6 billion convertible bond offering.
Software company shares were among the day’s top performers, building on positive momentum from recent trading sessions.
Workday climbed 3.3%, Atlassian jumped 3.9%, Intuit moved up 2.1%, while Zscaler and ServiceNow posted gains of 5.6% and 2.1% respectively.
Wednesday will bring the release of minutes from the U.S. Federal Reserve’s most recent policy meeting, which investors will examine for insights into policymaker support for shifting to a neutral position from their current easing approach.
Market pricing suggests roughly a 40% probability the central bank will increase interest rates by at least 25 basis points in January, based on CME’s FedWatch tool.
Corporate earnings represent another crucial market test. Nvidia, currently the world’s most valuable company, will announce results Wednesday, with investors seeking proof that artificial intelligence-driven demand can support high valuations throughout the semiconductor industry.
Walmart, the globe’s largest retailer, will also release earnings this week, potentially providing clearer insight into how U.S. consumers are managing widespread inflationary pressures.
