Stock Market Today: Nasdaq Futures Slip on AI Fears

The stock market today opened its Tuesday session on shaky ground, with futures pointing to a weak start for technology shares as investors weighed a dismal overseas stock debut, renewed selling in AI-linked names, and a sharp rebound in crude prices. The cautious tone comes just as Wall Street braces for a heavy stretch of corporate earnings that could decide whether the recent recovery in tech stocks regains momentum — or gives way to a deeper pullback.

As of 5:20 a.m. Eastern time, Nasdaq 100 futures were down 147.75 points, or 0.5 percent, while S&P 500 futures slipped 6.75 points, or 0.09 percent. Dow futures bucked the trend, rising 115 points, or 0.22 percent, reflecting the day’s split between struggling technology shares and relative steadiness elsewhere. The December Nasdaq 100 E-mini contract was down about 0.31 percent in early trading, according to market data.

The weakness follows a brief reprieve on Monday, when the S&P 500 and the Nasdaq advanced as investors bought back into technology stocks after a sharp selloff last week. That rebound is now being tested by fresh doubts about the sustainability of the artificial intelligence spending boom — doubts sharpened overnight by one of the worst trading debuts of the year.

Stock Futures Today: The Elice IPO Flop Rattles AI Nerves

The spark for Tuesday’s renewed selling came from Seoul, where shares of Elice Group, a South Korean AI infrastructure company, cratered in their market debut. The stock tumbled nearly 30 percent below its initial public offering price, with some reports putting the first-day plunge as deep as 32 percent — marking the worst trading debut for a sizable company in the country.

Elice had raised 201.1 billion won, roughly $151 million, in its offering. For a company positioned squarely in the AI infrastructure buildout — the data centers, servers, and networking gear powering the AI boom — such a disastrous first day of trading sent an unmistakable signal: investors are growing far more skeptical about the valuations attached to AI-adjacent businesses.

The lackluster debut reignited doubts about the sustainability of the AI spending boom and triggered a fresh wave of selling in AI-related stocks across the globe. The episode fits a pattern that has defined recent sessions: every fresh data point on AI infrastructure financing is being scrutinized for signs that the boom is running on borrowed money and borrowed time.

Nasdaq Today: AI Stocks Resume Their Slide

In U.S. premarket trading, the pain was concentrated in the names most exposed to AI infrastructure spending. CoreWeave, the cloud computing company that has become a poster child for the AI buildout trade, dropped 3.1 percent before the bell. Nebius Group, another AI infrastructure play, lost 2.9 percent. Apple fell 1 percent, and nvidia stock slipped marginally — a modest move for the chip giant, but a telling one given its role as the bellwether of the entire AI trade.

The declines followed last week’s sharp selloff, which was driven in part by concerns over CoreWeave’s debt load and the rising cost of financing the AI buildout. Monday’s rebound had suggested investors were willing to buy the dip, but Tuesday’s futures action indicates that confidence is fragile.

“I see this as a dip inside a selective market rather than a genuine AI buying opportunity or the start of a deeper repricing,” said Ion Jauregui, an analyst at ActivTrades. “Investors are pickier about AI stories than they were a year ago.”

That pickiness reflects a fundamental reassessment underway on Wall Street. Investors are questioning the scale of corporate borrowing to fund data center construction, the political pushback against new data center projects, and competition from Chinese chipmakers. The market, analysts say, is repricing anything that funds multi-year builds against revenue that arrives much later.

The skepticism has been building for days. Last week, a global rout in AI-linked stocks accelerated after a hotter-than-expected inflation reading raised expectations for tighter Federal Reserve policy. Chipmakers Samsung Electronics and SK Hynix lost 9.5 and 11 percent respectively in South Korea, Japan’s SoftBank Group fell 9.3 percent, and even better-than-expected guidance from Taiwan Semiconductor failed to lift sentiment. In Europe, ASML — the continent’s most valuable company — dropped more than 6 percent.

“We are seeing some blocks being pulled out of the Jenga Tower that is the AI capex boom,” said Joachim Klement, a strategist at Panmure Liberum, during last week’s selloff. “Higher debt costs makes it extremely difficult for neoclouds and hyperscalers to finance further data centers now that their free cash flows have evaporated.”

Oil Prices Today: Brent Nears a Five-Month High

Adding to the market’s unease, crude prices jumped on Tuesday, complicating the inflation picture just as investors parse every data point for clues about interest rates. Brent crude rose 1.7 percent to around $111 a barrel, near a five-month high, while U.S. benchmark WTI crude climbed more than 3 percent.

Traders are pricing in a geopolitical risk premium tied to attacks on Saudi infrastructure by Houthi forces and reports of vessel attacks in the Gulf — developments that have revived worries about Middle East supply disruptions. Higher oil prices can increase transportation and operating costs across the economy, add to inflationary pressure, and keep borrowing costs elevated, all of which weigh on investor sentiment and corporate profit margins.

The oil rally lands at an awkward moment for markets already nervous about inflation. With price pressures still running hot enough to keep the Federal Reserve cautious, any sustained climb in energy costs risks reinforcing expectations that interest rates stay higher for longer — a headwind for the growth stocks that dominate the Nasdaq.

The Earnings Reports Gauntlet Begins

Attention now turns to a packed earnings calendar that will test whether the biggest technology companies can justify their valuations. Quarterly results from SpaceX and Netflix are due after the market closes on Tuesday, while heavyweights Meta Platforms and Tesla are scheduled to report on Wednesday. Before Tuesday’s opening bell, investors will also hear from General Motors, Hasbro, Halliburton, and 3M, alongside fresh U.S. housing market data.

The coming reports may provide important clues about whether the recent recovery in technology shares can regain momentum or whether caution will continue to dominate trading. In particular, investors will be listening for what executives say about AI spending plans — capital expenditure guidance from the cloud and chip giants has become the single most market-moving variable in recent quarters.

Monday’s session offered a preview of how selective the market has become. Chip and AI infrastructure stocks that showed genuine strength were rewarded: Western Digital rose more than 6 percent to lead gainers in both the S&P 500 and Nasdaq 100, while Sandisk gained more than 5 percent. Amazon advanced nearly 5 percent and was the top percentage gainer in the Dow after Morgan Stanley named the e-commerce and cloud giant a top pick and raised its price target to $350 from $335. Datadog surged more than 5 percent after Bernstein upgraded the stock to Outperform with a $350 price target. On the bearish side, NRG Energy slid more than 4 percent after Jefferies and Seaport Research lowered their price targets on the stock.

The meta stock and tesla stock reports on Wednesday will carry particular weight. Both companies sit at the intersection of the AI trade and consumer spending, and their results — along with Netflix’s subscriber and advertising numbers on Tuesday — will help investors judge whether Big Tech’s growth engine is still running at full speed.

Stock Market Live Updates: Why Investors Are Pickier Now

Step back from the day-to-day swings, and a larger story is unfolding about how Wall Street values the AI boom. A year ago, almost any company with a credible AI story commanded a premium. Today, as Jauregui’s comment captures, investors are demanding proof — proof that massive capital spending will generate sufficient long-term revenue and profits, proof that debt loads are manageable, and proof that the infrastructure being built will find paying customers.

The financing question is central. Data center construction is enormously capital-intensive, and much of it is being funded with debt at a time when borrowing costs remain elevated. When a company like Elice can’t hold its IPO price on day one, it suggests the market is no longer willing to underwrite that expansion on faith alone.

Political risk is compounding the financial risk. Data center projects face growing local opposition over power consumption and electricity prices, and midterm-season rhetoric around energy costs has given investors another reason to step back. Chinese competition in chips adds a further overhang for the hardware names.

None of this means the AI boom is over — corporate spending on AI infrastructure remains enormous by any historical standard. But the market’s message this week is that the easy phase of the trade, when rising tides lifted every AI-adjacent stock, has given way to something more discriminating.

What to Watch as Trading Gets Underway

For the rest of Tuesday’s session, investors will be watching several crosscurrents. Big Tech earnings headline the calendar, with SpaceX and Netflix reporting after the close. AI spending plans and profit forecasts from company executives will be parsed for any sign that the capital-expenditure cycle is slowing. Oil prices remain a wild card — any escalation in Middle East tensions could push Brent further above $111 and deepen inflation worries. And U.S. housing data due Tuesday will feed into the broader debate about the economy’s resilience.

The broader question hanging over the market is whether Tuesday’s futures weakness marks the start of a deeper repricing or simply another dip in a selective market. With the Nasdaq having bounced on Monday only to falter again, the burden of proof now sits squarely with corporate earnings: the numbers, and the guidance behind them, will decide whether the AI trade steadies — or slips further.

Source: The Wall Street Journal