U.S. Stock Futures Stabilize After Tech Sell-Off; Tariffs and Mideast Tensions in Focus

U.S. stock index futures were mostly flat in overnight trading after a sharp, technology-driven sell-off on Thursday, as investors grappled with concerns over heavy AI spending, new trade tariffs, and escalating geopolitical tensions.

By 10:22 PM ET (02:22 GMT), S&P 500 Futures were steady, while Nasdaq 100 Futures edged down 0.1% and Dow Jones Futures ticked up 0.1%, according to Investing.com data.

Wall Street Recoils from Tech Losses

The previous trading session saw significant declines on Wall Street, with the Nasdaq Composite plunging over 2%. The S&P 500 fell 1.2%, and the Dow Jones Industrial Average shed nearly 1%.

The sell-off was led by steep losses in major technology stocks. Shares of Tesla Inc. (TSLA) plummeted nearly 15% and Alphabet Inc. (GOOGL) dropped 7.1% after both companies flagged high levels of spending to build out their artificial intelligence capabilities. This sparked broader market concerns about the substantial costs and uncertain timelines for returns on massive AI investments.

Tariffs and Geopolitical Risks Weigh on Sentiment

Adding to investor anxiety, the Trump administration announced new tariffs ranging from 10% to 12.5% on 60 of the country's key trading partners, including China, Japan, and the U.K. U.S. Trade Representative Jamieson Greer stated the duties were in response to claims that the countries failed to adequately address forced labor.

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Meanwhile, geopolitical risks intensified as oil prices surged. The increase followed attacks by Yemen's Iran-backed Houthi group on two Saudi Arabian tankers in the Red Sea. The development fueled concerns over potential energy-driven inflation, which could influence the Federal Reserve's monetary policy outlook.

Looking Ahead

Investors are looking toward a busy week of corporate earnings and economic events. The Federal Reserve is set to hold its policy meeting next week and is widely expected to keep interest rates unchanged.

A host of major technology companies are also scheduled to report quarterly results, which will be closely watched for further commentary on AI spending and growth outlooks:

• Wednesday: Microsoft Corporation (MSFT) and Meta Platforms Inc (META)
• Thursday: Apple Inc (AAPL) and Amazon.com Inc (AMZN)