Dow Jones futures retreat after tech sell-off amid Middle East tensions

Concerns over AI expenditure and mounting technology-sector debt weigh on broader sentiment, leaving US index futures mixed.
Tesla, Nvidia, AMD and Meta were among the major technology stocks dragging down the Nasdaq and S&P 500.
Near 4.98%, 10-year Treasury yields reflect a shift towards safe-haven bonds as the Middle East conflict intensifies.

Dow Jones futures are down 0.37%. The contract trades near 52,870 during Friday’s European session. S&P 500 futures are 0.07% lower at around 7,700, whereas Nasdaq 100 futures rise 0.16% to near 29,190.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Doubts over the sustainability of artificial intelligence investment continue to undermine sentiment. US equity futures are mixed after technology shares suffered a steep sell-off the previous day.

Losses of 2.6% for the Nasdaq Composite and 1.21% for the S&P 500 contrasted with a 0.02% gain for the Dow in Thursday’s regular US session. Memory chipmakers Micron and SanDisk, semiconductor groups Nvidia and AMD, and Elon Musk’s SpaceX and Tesla were among the main underperformers. The selling came after Meta Platforms outlined plans for higher capital expenditure. That renewed concerns that technology companies may borrow more to finance the expansion of their AI infrastructure.

Intensifying Middle East tensions also weighed on equities as investors moved into the relative safety of bonds. On Friday, the US 10-year Treasury yield recovered to near 4.98%, having dropped more than 10 basis points to a one-month low the day before. Before that rebound, safe-haven inflows had supported US bond prices as the sell-off in technology and artificial intelligence shares deepened.

Semiconductor and CoreWeave declines intensify AI growth concerns

Renewed questions over the staying power of AI-led growth added to the broader risk-off mood, according to Deutsche Bank analysts. As they put it, “yesterday also brought a fresh wave of concern around AI-driven growth, reversing some of the optimism from earlier in the week,” with several of the most exposed stocks enduring a “rough session.” The Philly semiconductor index “(-6.72%) had its worst day since June,” while CoreWeave’s share price “(-10.06%) fell to its lowest since May 2025,” illustrating the speed of the reversal in sentiment towards AI-related shares.

AI stocks: key questions

Artificial intelligence: the core concept

As an academic discipline, artificial intelligence aims to reproduce human cognitive functions, logical understanding, perception and pattern recognition in machines. Commonly shortened to AI, the field encompasses artificial neural networks, machine learning or predictive analytics, symbolic reasoning, deep learning, natural language processing, speech recognition, image recognition and expert systems. Its ultimate objective is artificial general intelligence, or AGI: a machine capable of tackling arbitrary problems without having been trained to solve them.

Artificial intelligence: practical applications

Artificial intelligence has a wide range of applications. Among the best known are generative AI platforms, including ChatGPT and Google’s Bard platform, which draw on large language model (LLM) training to respond to text queries. Users can also supply text prompts to Midjourney to produce original images. Other AI systems apply probabilistic methods to assess an entity’s characteristics or how it is perceived. Upstart’s lending platform, for example, assesses applicants’ creditworthiness through an AI-enhanced credit rating system that searches the internet for information on their careers, wealth profiles and relationships. In pharmaceutical research, other forms of AI draw on extensive databases of scientific studies to propose potential new medicines for laboratory testing. Content aggregators such as YouTube, Spotify and Facebook collect and organise data on viewing habits, using AI applications to recommend personalised content.

AI stocks: companies with exposure

The semiconductor company Nvidia (NVDA) produces AI-focused chips alongside some of the platforms engineers use to develop AI applications. Because it supplies the tools needed for further AI applications, many supporters regard Nvidia as a picks-and-shovels investment in the AI revolution. Palantir Technologies (PLTR), a “big data” analytics company, holds substantial contracts with the US intelligence community. Those agencies use its Gotham platform to analyse data, identify intelligence leads and support pattern recognition. Large corporations use its Foundry product to monitor employee and customer data for predictive analytics and anomaly detection. Microsoft (MSFT), meanwhile, owns a substantial stake in OpenAI, the privately held creator of ChatGPT. OpenAI’s technology has been integrated into Microsoft’s Bing search engine.

AI and the risk of another equity bubble

AI-related shares rallied after ChatGPT became publicly available in late 2022. Over the six months following its release, Nvidia gained well over 200%, prompting Wall Street commentators to question whether another technology bubble was taking hold. Stanley Druckenmiller, the prominent investor who has held large positions in both Palantir and Nvidia, argued that bubbles never last only six months. If enthusiasm for AI did develop into a bubble, he said, extreme valuations would persist for at least two and a half years or longer, as they did during the DotCom bubble in the late 1990s. At the midpoint of 2023, the best assessment was that the market was not in a bubble, at least for the time being. Nvidia was trading at 27 times forward sales, but analysts expected exceptionally strong revenue growth for years ahead. For comparison, the NASDAQ 100 traded at 60 times earnings at the peak of the DotCom bubble, against 25 times earnings in mid-2023.