Nasdaq Futures Slip as Broadcom Results Fail to Ease AI Fears, Fed Speak on Tap

December Nasdaq 100 E-Mini futures (NQZ25) are trending down -0.58% this morning as Broadcom’s earnings report prompted further concerns about the AI trade.

Broadcom (AVGO) slid over -5% in pre-market trading after the software and semiconductor giant’s sales outlook for the AI market fell short of investors’ lofty expectations. Chief Executive Officer Hock Tan said on a conference call that the company has a $73 billion backlog in AI product orders to be delivered over the next six quarters. However, this figure disappointed some investors. The company also said margins would decline due to a higher mix of AI-related revenue, adding to concerns about returns from AI.

Investor focus now turns to remarks from Federal Reserve officials.

In yesterday’s trading session, Wall Street’s major indices ended mixed. Visa (V) climbed over +6% and was the top percentage gainer on the Dow after BofA upgraded the stock to Buy from Neutral with a price target of $382. Also, shares of cruise line operators advanced, with Royal Caribbean Cruises (RCL) rising more than +7% to lead gainers in the S&P 500 and Norwegian Cruise Line Holdings (NCLH) gaining over +6%. In addition, Planet Labs (PL) jumped over +35% after the company reported upbeat Q3 results and raised its full-year revenue guidance. On the bearish side, Oracle (ORCL) plunged more than -10% and was the top percentage loser on the S&P 500 after the software and cloud-computing company posted weaker-than-expected FQ2 cloud sales and raised its full-year capital spending outlook.

“This Oracle move is, of course, dragging down the entire ecosystem. However, market breadth is really positive for a second consecutive day,” according to Alexander Altmann, global head of equities tactical strategies at Barclays Plc.

The Labor Department’s report on Thursday showed that the number of Americans filing for initial jobless claims in the past week rose by +44K to a 3-month high of 236K, compared with the 220K expected. Separately, delayed data showed the U.S. trade deficit unexpectedly narrowed to -$52.8 billion in September, stronger than expectations of -$62.5 billion.

Meanwhile, U.S. rate futures have priced in a 73.4% chance of no rate change and a 26.6% chance of a 25 basis point rate cut at the next FOMC meeting in January.

Today, market participants will parse comments from Philadelphia Fed President Anna Paulson, Cleveland Fed President Beth Hammack, and Chicago Fed President Austan Goolsbee.

“Focus will fall largely on Fedspeak, with scheduled remarks due from 2026 voters Hammack and Paulson, while dissenters Goolsbee, Schmid, and Miran will all likely issue statements explaining why they didn’t vote with the majority on Wednesday,” Pepperstone’s Michael Brown said in a note.

The U.S. economic data slate is empty on Friday.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.169%, up +0.60%.

The Euro Stoxx 50 Index is up +0.57% this morning, mirroring global optimism after the Fed cut interest rates this week and struck an upbeat tone on the U.S. economy. Bank stocks led the gains on Friday, with UBS Group AG (UBSG.Z.IX) climbing over +3% after Swiss lawmakers floated a compromise on new capital rules aimed at keeping the bank internationally competitive. Industrial and travel stocks also advanced. The benchmark index is on track to notch its third consecutive weekly gain. Data from the Office for National Statistics released on Friday showed that the U.K. economy shrank for a second consecutive month in October, reinforcing expectations that the Bank of England will cut its key interest rate next week. Separately, final data confirmed that the annual inflation rate in Germany and France was unchanged in November from the previous month, while Spain’s annual inflation rate eased slightly last month. Investors are now turning their attention to the European Central Bank’s final rate decision of the year and U.S. inflation data next week. In other corporate news, BNP Paribas (BNP.FP) rose over +1% after the French lender announced that it had entered exclusive talks to sell its 67% stake in its Moroccan unit, BMCI, to Holmarcom Group. 

U.K. GDP, Germany’s CPI, France’s CPI, and Spain’s CPI data were released today.

U.K. October GDP fell -0.1% m/m and rose +1.1% y/y, weaker than expectations of +0.1% m/m and +1.4% y/y.

The German November CPI fell -0.2% m/m and rose +2.3% y/y, in line with expectations.

The French November CPI fell -0.2% m/m and rose +0.9% y/y, compared to expectations of -0.1% m/m and +0.9% y/y.

The Spanish November CPI rose +0.2% m/m and +3.0% y/y, in line with expectations.

Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.41%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.37%.

China’s Shanghai Composite Index closed higher today after the country’s leadership signaled it would maintain economic support next year. Non-ferrous metal stocks led the gains on Friday as copper prices surged to a record high and gold climbed to a one-month peak. AI-related stocks also gained ground. Still, the benchmark index notched a weekly loss. Chinese leaders pledged to maintain a “proactive” fiscal policy next year aimed at boosting both consumption and investment to sustain strong economic growth, according to a readout from China’s Central Economic Work Conference held December 10-11. Also, the leadership vowed to use interest rate and reserve requirement cuts “flexibly and efficiently” to ensure ample liquidity. Goldman Sachs economists said the tone points to a modestly pro-growth policy stance. “Policymakers this time emphasized growth challenges, highlighted the need to boost consumption and stabilize the property sector, and pledged further easing on monetary, fiscal, credit, and property fronts,” the economists wrote. However, they noted that the readout is “less dovish” than last year. GS expects the 2026 policy targets to remain unchanged, including GDP growth of around 5%, CPI at roughly 2%, and an on-budget fiscal deficit equal to 4% of GDP. In corporate news, Moore Threads plunged over -13% after the AI chip startup cautioned about trading risks following explosive gains since its market debut last week.

Japan’s Nikkei 225 Stock Index closed higher today, tracking broadly positive cues from Wall Street overnight, while investors braced for next week’s Bank of Japan policy meeting. Financial stocks were among the biggest gainers on Friday on expectations that a BOJ interest-rate hike next week is all but certain. The benchmark index logged its third straight weekly gain. Data released on Friday showed that Japan’s monthly industrial production rose more than initially thought in October. Meanwhile, yields on benchmark Japanese government bonds climbed on Friday ahead of a widely expected BOJ rate hike next week. Reuters reported on Friday that the BOJ is likely to reaffirm its commitment to continue raising interest rates, while emphasizing that the pace of further hikes will depend on how the economy responds to each increase. Mizuho Securities senior market economist Yusuke Matsuo expects the central bank to keep raising its key rate once every six months until it reaches a neutral level that neither stimulates nor restrains growth. In other news, Jefferies’ Shrikant Kale said Japanese stocks offer a compelling 2026 outlook as bottom-up corporate reforms led by the Tokyo Stock Exchange align with top-down pro-growth political leadership. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -2.09% to 26.69.

The Japanese October Industrial Production was revised higher to +1.5% m/m from the preliminary estimate of +1.4% m/m.

Pre-Market U.S. Stock Movers

Broadcom (AVGO) slid over -5% in pre-market trading after the software and semiconductor giant’s sales outlook for the AI market fell short of investors’ lofty expectations.

Ciena Corp. (CIEN) fell more than -2% in pre-market trading after Northland downgraded the stock to Market Perform from Outperform with a $190 price target.

Lululemon Athletica (LULU) surged more than +8% in pre-market trading after the retailer posted upbeat Q3 results and raised its full-year guidance.

RH (RH) rose over +3% in pre-market trading after the furniture company reported better-than-expected Q3 revenue.

Citigroup (C) gained more than +1% in pre-market trading after JPMorgan upgraded the stock to Overweight from Neutral with a $124 price target.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Friday - December 12th

Johnson Outdoors (JOUT) and Zedge (ZDGE).