Stock Futures Slip Ahead of May Payrolls Data – Is the AI Trade Running Out of Steam?

TLDR

• Nasdaq 100 futures dropped 1.0–1.2%, S&P 500 futures fell around 0.5%, while Dow futures edged slightly higher
• Broadcom’s disappointing revenue guidance triggered a tech selloff that spread to Asian markets overnight
• The May jobs report, due at 8:30 a.m. ET, is expected to show 105,000 new jobs added
• Bitcoin fell 2.2% over 24 hours to $62,136, tracking the broader risk-off mood
• Oil prices dipped on hopes of a US-Iran deal, with Brent crude sliding to $94.66 a barrel

Investors pulled back from tech stocks on Friday morning as Nasdaq futures dropped ahead of the May jobs report. The AI-driven rally that lifted markets earlier in the week came to a halt.

Nasdaq 100 futures fell between 1.0% and 1.2% in premarket trading. S&P 500 futures slipped around 0.5% to 0.6%. Dow futures edged up slightly, adding roughly 17 to 29 points.

The Dow closed at a record high on Thursday, led by healthcare and financial stocks. That was a sharp contrast to the tech sector, which came under pressure after chipmaker Broadcom reported earnings.

Broadcom Results Shake the AI Trade

Broadcom’s revenue guidance came in below the more optimistic market expectations. That triggered a selloff in tech stocks that carried into overnight Asian trading sessions.

South Korea’s Kospi index slumped 5.5%. Deutsche Bank analyst Jim Reid described the moves as a “hangover” from Broadcom’s results, where forecasts fell short of elevated hopes.

European chip stocks also declined, following weakness in US and Asian peers. The ripple effect from Broadcom’s guidance was felt across global markets.

Jobs Report in Focus

The May nonfarm payrolls report was due at 8:30 a.m. Eastern time. Economists polled by FactSet expected the US to have added 105,000 jobs in May.

A report in that range would support the case for the Federal Reserve to keep interest rates higher to fight inflation. Markets were watching closely for any signal that could shift the Fed’s path.

A steady unemployment rate alongside an uptick in payrolls would be seen as a sign of economic stability. That kind of data could reinforce the Fed’s cautious stance on rate cuts.

Bitcoin and Oil Also Move Lower

Bitcoin dropped 2.2% over the prior 24 hours to $62,136. The decline extended a recent selloff and reflected the broader risk-off tone in markets.

Oil prices also slipped. Brent crude fell 0.4% to $94.66 a barrel, and West Texas Intermediate dropped 0.7% to $92.36. Investors continued to bet on a potential US-Iran deal that could ease supply concerns.

The dollar edged 0.1% lower against a basket of peers. The yield on the 10-year Treasury note fell 2 basis points to 4.47%.

Uncertainty around Middle East negotiations persisted. President Trump stated that US-Iran talks were in their “final” stages, though reports of stalled negotiations continued to weigh on sentiment.

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