US stock futures were mixed on Tuesday, October 13, as investors assessed major bank earnings and tech sector concerns. Nasdaq-100 futures fell 0.7% amid worries over AI spending, while Dow Jones futures gained 0.7%. Many chip-related shares fell, though banking stocks like Goldman Sachs climbed after reporting strong third-quarter results.
US stock futures were mixed in early trading on Tuesday (October 13) as investors assessed earnings from major banks and a sharp overnight sell-off in South Korea weighed on memory stocks.
S&P 500 futures slipped 0.1%, while Nasdaq-100 futures fell 0.7%. Dow Jones Industrial Average futures bucked the trend, gaining 372 points, or 0.7%.
China’s CXMT is narrowing the technology gap with Samsung Electronics, SK Hynix and Micron — the world’s biggest memory chipmakers — raising the prospect of greater competition that could erode the three DRAM giants’ pricing power and market share.
Other chip-related shares traded lower. Nvidia Corp. was down 0.8% premarket. Advanced Micro Devices Inc. and Broadcom Inc. fell 1.7% and 1.5%, respectively.
Among other individual stocks, JPMorgan Chase — up just 3.8% this year through Monday — rose 1% premarket despite reporting a surprise drop in fixed-income trading revenue in the third quarter.
Goldman Sachs climbed 3.3% after its equities traders blew past expectations in the third quarter. US banking stocks are already in a correction, with the KBW Bank Index down 12% from its mid-August peak. Citigroup Inc. and Wells Fargo & Co. also report before the open.
Corporate America is now navigating one of the strongest profit cycles in recent history. Yet investors are growing uneasy about whether massive AI spending will pay off, especially as a higher cost of capital raises the hurdle rate for investment.
Negative headlines — including a warning on issues with funding the AI buildout and ‘casino’-like market sentiment from Broadcom CEO Hock Tan — come at a time when investors have piled into the trade. That said, other nooks of the AI trade were stable Tuesday, with Apple Inc., Microsoft Corp. and Alphabet Inc. all drifting higher premarket.
Fund managers in Bank of America’s latest survey are the most exposed to technology stocks since the rebound from the COVID pandemic six years ago, with 37% overweight the sector. About 45% of respondents agreed that there will be an AI bubble in 2027, while 42% don’t see a bubble.