US stock futures moved in different directions on Tuesday, October 20, as renewed selling in artificial intelligence shares interrupted Monday’s recovery. NASDAQ futures declined while oil climbed above USD 110 a barrel ahead of the opening bell.
Investors also bought US Treasury bonds despite the rise in energy prices. Attention shifted toward technology earnings, borrowing costs and the outlook for corporate spending on AI infrastructure.
NASDAQ Futures Fall After Monday's Technology Rebound
NASDAQ 100 futures fell about 0.3% in early trading, while S&P 500 futures were little changed. Dow Jones Industrial Average futures gained around 0.2%. The moves followed Monday’s rally in technology shares, when the NASDAQ Composite rose 1.1% and the S&P 500 added 0.4%.
The Dow, however, slipped 0.1% on Monday. NVIDIA advanced 1.4%, Tesla gained 3.8% and Alphabet rose about 1%. Those increases followed a difficult week for companies connected to AI infrastructure and semiconductor production.
Selling returned to several chip stocks before Tuesday’s opening bell. Micron fell more than 2% in premarket trading, while Intel and Qualcomm also declined. AI cloud provider CoreWeave lost roughly 3% after dropping more than 25% during the previous week. Investors have been examining how companies fund new data centers and when those investments will generate revenue.
Elice IPO Decline Adds Pressure to AI Stocks
South Korean AI services company Elice lost about 32% on its first trading day in Seoul. Its shares closed at 60,500 won, compared with the IPO price of 90,500 won. The company raised 201.1 billion won in its offering and plans to use much of the money for data centers and related infrastructure. Elice reported first-half revenue of 34 billion won and an operating profit of 10 billion won.
South Korea’s Kospi fell 3.73%, while Japan’s Nikkei 225 dropped 1.3%. Samsung Electronics and SK Hynix declined as regional semiconductor shares came under renewed pressure. Meanwhile, European technology stocks also fell, with ASML and ASMI among the companies trading lower.
ABB offered a contrast between business demand and share performance. The Swiss engineering company reported third-quarter orders of USD 12.06 billion, up 40% from a year earlier. Revenue increased 14% to USD 9.7 billion.
Chief Executive Morten Wierod said, “Most notably so in the data center segment where we saw a triple-digit increase.” Nevertheless, ABB shares fell more than 6% during Tuesday’s session.
Oil Tops USD 110 as Treasury Yields Decline
Brent crude rose above USD 110 a barrel and reached its highest level in about five months. Traders monitored threats to Middle Eastern oil supplies after Yemen’s Iran-aligned Houthi group said it had attacked Saudi energy and other targets. The possibility of further disruption kept oil prices elevated.
US government bonds gained even as crude prices rose. The yield on the benchmark 10-year Treasury note fell about two basis points to roughly 5.12%. Bond yields move in the opposite direction from prices. The dollar also weakened against a basket of major currencies.
European markets remained under pressure. The Stoxx 600 dropped about 0.6%, while French government debt faced renewed attention following protests and concerns about public finances. The lower US Treasury yield contrasted with investors’ continuing worries about inflation from higher fuel costs.
Earnings and Housing Data Remain in Focus
Investors were preparing for quarterly results from Netflix and United Airlines on Tuesday, with General Motors also scheduled to report. Meta Platforms and Tesla were due to publish earnings later in the week. Their results will provide updated figures on spending, revenue and customer demand.
Companies investing heavily in AI face closer examination of their financing plans. Ninghui Liu, head of investment strategy and research for Asia-Pacific at State Street Investment Management, told Reuters, "What they're questioning is whether every dollar of AI capex earns more than it costs to finance.”
Tuesday's economic calendar also included US housing starts and pending home sales figures. The reports will provide another measure of economic activity as investors assess high borrowing costs. With technology shares, crude oil and bond yields moving in different directions, traders awaited the next set of corporate results and economic releases.
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