Nasdaq Futures Plunge as Samsung Sparks Chip Selloff

September Nasdaq 100 E-Mini futures (NQU26) are down -0.97% this morning as chipmakers came under renewed selling pressure after a blowout forecast from Samsung Electronics failed to impress investors.

Samsung, the world’s largest memory chipmaker by market value, delivered a rosy update today, projecting a 19-fold surge in Q2 operating profit. However, that was not enough to satisfy investors’ lofty expectations. The company’s shares sank as much as -10% before closing down -6.9% in Seoul, triggering a global selloff in chip stocks. U.S. memory chipmakers Sandisk and Micron Technology slumped over -5% in pre-market trading.

Meanwhile, the price of WTI crude rose nearly +1% on Tuesday following attacks on shipping in and around the Strait of Hormuz. Axios reported that two vessels were struck and suffered damage. Treasuries fell across the curve as traders increased their bets on tighter monetary policy, with the benchmark 10-year yield rising two basis points to 4.50%.

In yesterday’s trading session, Wall Street’s major equity averages ended in the green. Chip and AI infrastructure stocks climbed, with Western Digital (WDC) surging over +7% to lead gainers in the Nasdaq 100 and Advanced Micro Devices (AMD) rising more than +6%. Also, Dell Technologies (DELL) gained over +4% after President Trump said during a White House press conference that consumers should “go out and buy a Dell computer.” In addition, Broadcom (AVGO) advanced more than +3% after the company said it will supply new custom chips to Apple under an expanded partnership that now runs through 2031. On the bearish side, Solstice Advanced Materials (SOLS) plunged over -15% after the Honeywell spinoff agreed to acquire Element Solutions in a cash-and-stock deal.

Economic data released on Monday showed that U.S. services-sector activity continued to expand in June, albeit at a slower pace. The U.S. ISM services index fell to 54.0 in June, slightly weaker than expectations of 54.2. At the same time, the June ISM services prices-paid sub-index eased to 67.7, falling below 70 for the first time since February. In addition, the employment sub-index expanded for the first time in four months.

“We’ve seen stronger markets and stronger economies over the last 30 years, but we’ve rarely seen a healthier intersection of the two. Earnings continue to surprise to the upside, valuations have become more reasonable, inflation expectations are easing, and the economy is holding up without overheating,” said Mark Hackett at Nationwide.

Fed Governor Christopher Waller on Monday defended the central bank’s use of forward guidance, saying it can play a useful role if communicated carefully. “I continue to believe that forward guidance can be a valuable tool that has, at times, significantly strengthened policymaking and will continue to be useful,” Waller said. Waller’s remarks contrasted with those of new Chairman Kevin Warsh, who has pledged to move the central bank away from using forward guidance and instead adopt an approach that is more responsive to changing economic data.

Today, investors will focus on U.S. Trade Balance data, set to be released in a couple of hours. Economists forecast that the trade deficit will widen to -$78.3 billion in May from -$55.9 billion in April.

Market participants will also parse comments today from Fed Vice Chair for Supervision Michelle Bowman.

U.S. rate futures have priced in a 74.9% probability of no rate change and a 25.1% chance of a 25 basis point rate hike at the Fed’s monetary policy committee meeting later this month.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.50%, up +0.49%.

The Euro Stoxx 50 Index is down -0.42% this morning as technology stocks came under renewed selling pressure following Samsung Electronics’ second-quarter update. Chip and other AI-related stocks tumbled on Tuesday, tracking losses in their Asian peers after a blowout forecast from Samsung Electronics failed to impress investors. Limiting losses, energy and consumer-related stocks gained. Data from the federal statistics office released on Tuesday showed that Germany’s monthly industrial production rose much more than expected in May, driven by a sharp increase in automotive output. Meanwhile, European Central Bank Governing Council member Fabio Panetta said on Tuesday that the outlook for the Eurozone economy remains fragile, calling for monetary policy decisions to be assessed against a range of scenarios amid profound global shifts. “The outlook remains fragile. Upside risks to inflation continue to coexist with downside risks to growth,” Panetta said. Elsewhere, attention was also on a NATO summit in Turkey, where countries are expected to announce new agreements in response to U.S. pressure to boost European defense spending. In corporate news, Siemens Energy AG (ENR.D.DX) sank over -6% after Barclays downgraded the stock to Underweight from Equal Weight. 

Germany’s Industrial Production data was released today.

The German May Industrial Production rose +0.9% m/m, stronger than expectations of +0.1% m/m.

Asian stock markets today closed in the red. China’s Shanghai Composite Index (SHCOMP) closed down -1.26%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -2.12%.

China’s Shanghai Composite Index closed lower today, dragged down by weakness in the property sector. Real estate stocks sank on Tuesday. The drop came after the World Bank projected that China’s economic growth would slow to 4.4% in 2026 and 4.3% in 2027, noting that the property sector continues to adjust to weaker housing demand and consumers remain cautious. Data from the People’s Bank of China released on Tuesday showed that China’s foreign exchange reserves fell more than expected in June, snapping a two-month streak of gains amid a strengthening U.S. dollar. Meanwhile, Beijing and Hong Kong authorities on Tuesday unveiled a series of measures to boost currency, bond, and gold trading in Hong Kong, intensifying efforts to establish the city as a leading offshore yuan center amid heightened geopolitical tensions. In corporate news, Beijing Tong Ren Tang Healthcare shares tanked about -39% in their Hong Kong trading debut after the company raised $75.84 million in a listing. Investor attention this week is on China’s key inflation gauges for June. Economists expect China’s consumer inflation to ease slightly due to lower pork prices, reflecting weak consumer demand, while producer prices are projected to pick up, supported by a favorable base effect.

Japan’s Nikkei 225 Stock Index closed sharply lower today as renewed selling in technology stocks intensified concerns that the AI-driven rally may have run ahead of itself. Chip and other AI-related stocks tumbled on Tuesday after South Korean memory chipmaker Samsung Electronics sank nearly -7%, despite projecting a 19-fold jump in Q2 operating profit. Samsung stock’s slump after the earnings showed “investors might have already priced in solid results and are increasingly focused on the longer-term trajectory of the memory cycle,” said Albert Yong, managing partner at hedge fund Petra Capital Management. Meanwhile, Japanese bonds rallied briefly on Tuesday after an auction of 30-year government debt with the first 4% coupon attracted the strongest demand in seven years. The yield on Japan’s benchmark 10-year bond initially fell as much as three basis points but later reversed course and rose as investors continued to assess the risk of rising government spending and the Bank of Japan raising interest rates too slowly to curb inflation. On the economic front, government data showed on Tuesday that Japan’s real wages rose 1.4% in May from a year earlier, marking a fifth straight month of gains, although the pace of growth slowed amid reaccelerating consumer inflation. Separate data showed that Japan’s annual household spending edged down in May, extending its streak of declines to six consecutive months. Capital Economics’ Abhijit Surya said that the slowdown in Japan’s wage growth in May is unlikely to prevent the Bank of Japan from raising interest rates further. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -20.50% to 29.70.

The Japanese May Household Spending rose +3.7% m/m and fell -0.4% y/y, stronger than expectations of +1.4% m/m and -2.3% y/y.

The Japanese May Leading Index stood at 116.8, weaker than expectations of 116.9.

Pre-Market U.S. Stock Movers

Chip and AI infrastructure stocks slumped in pre-market trading, with Sandisk (SNDK) falling over -6% and Marvell Technology (MRVL) sliding more than -4%.

Rivian Automotive (RIVN) sank over -8% in pre-market trading after the EV maker said it would sell 75 million shares to repay a $4.5 billion loan from the Energy Department.

SpaceX (SPCX) slipped more than -1% in pre-market trading ahead of its addition to the Nasdaq 100 Index today, which is expected to trigger some mild volatility.

Most members of the Magnificent Seven stocks edged higher in pre-market trading, with Microsoft (MSFT) and Amazon.com (AMZN) rising over +1%.

Fiserv (FISV) climbed more than +6% in pre-market trading after The Wall Street Journal reported that the fintech company was considering a potential sale of its debit card transaction network to big U.S. banks.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - July 7th

Albertsons Companies (ACI), Penguin Solutions (PENG), Enerpac Tool Group (EPAC), Kura Sushi USA (KRUS), Trilogy Metals (TMQ), Saratoga Investment (SAR).