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

Broader market sentiment remains under heavy pressure from worries over AI spending and mounting technology-sector debt, with US index futures trading mixed.
The Nasdaq and S&P 500 were dragged lower by leading technology stocks, among them Tesla, Nvidia, AMD and Meta.
Safe-haven demand for bonds gathered pace as the Middle East conflict intensified, with 10-year Treasury yields moving close to 4.98%.

A mixed picture emerges across US index futures during Friday’s European trading hours: Dow Jones futures are down 0.37% at around 52,870, while S&P 500 futures are 0.07% lower near 7,700. Nasdaq 100 futures, by contrast, are up 0.16% at approximately 29,190.

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

Sentiment remains weighed down by mounting doubts about the sustainability of artificial intelligence investments. Following the previous day’s steep sell-off in technology shares, US stock futures are trading in different directions.

Technology shares bore the brunt of Thursday’s regular US session, when the Nasdaq Composite lost 2.6% and the S&P 500 declined 1.21%; the Dow, however, inched up 0.02%. Among the weakest performers were memory chipmakers Micron and SanDisk, semiconductor majors Nvidia and AMD, and Elon Musk’s SpaceX and Tesla. The selling came after Meta Platforms outlined plans for higher capital expenditure, reviving concerns that technology firms may borrow more to finance the expansion of their AI infrastructure.

Equities also came under additional strain from intensifying Middle East tensions, as investors turned to the relative safety of bonds. After dropping more than 10 basis points to a one-month low on the previous day, the US 10-year Treasury yield recovered to around 4.98% on Friday. Earlier, safe-haven inflows prompted by the worsening sell-off in technology and artificial intelligence shares had put upward pressure on US bonds.

Why are AI growth concerns intensifying as semiconductor and CoreWeave shares slide?

Renewed questions about the staying power of AI-led growth have reinforced the wider 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,” resulting in a “rough session.” for several of the stocks most exposed to the theme. Highlighting the speed of the shift in sentiment against the AI sector, they note that the Philly semiconductor index “(-6.72%) had its worst day since June,” and CoreWeave’s share price “(-10.06%) fell to its lowest since May 2025,”

AI stocks: frequently asked questions

How is artificial intelligence defined?

At its core, artificial intelligence is an academic field concerned with replicating human cognitive abilities, logical understanding, perception and pattern recognition in machines. Commonly shortened to AI, it encompasses several sub-fields: artificial neural networks, machine learning or predictive analytics, symbolic reasoning, deep learning, natural language processing, speech recognition, image recognition and expert systems. The field’s ultimate objective is artificial general intelligence, or AGI: a machine capable of tackling arbitrary problems it has not been trained to solve.

Where is AI being applied?

Artificial intelligence has a wide range of applications. Among the best known are generative AI platforms, such as ChatGPT and Google’s Bard, which are trained on large language models (LLMs) to respond to text-based questions. For image creation, Midjourney produces original visuals from text supplied by users. Other AI systems employ probabilistic methods to assess an entity’s characteristics or how it is perceived. Upstart’s lending platform, for example, uses an AI-enhanced credit rating system to evaluate applicants’ creditworthiness, searching the internet for information about their careers, wealth profiles and relationships. In pharmaceutical research, other AI tools draw on extensive databases of scientific studies to propose potential new drugs for laboratory testing. Content aggregators including YouTube, Spotify and Facebook collect and organise information about users’ viewing habits, using AI applications to recommend personalised content.

Which stocks have exposure to the AI sector?

Among companies operating in this field is semiconductor manufacturer Nvidia (NVDA), which makes AI-focused computer chips as well as 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. Another participant is Palantir Technologies (PLTR), a “big data” analytics business with substantial contracts across the US intelligence community. Its Gotham platform helps that community sift through information, identify intelligence leads and support pattern recognition. Large corporations use Palantir’s Foundry product to monitor employee and customer data for predictive analytics and anomaly detection. Microsoft (MSFT), meanwhile, owns a substantial stake in OpenAI, the creator of ChatGPT, which remains unlisted. OpenAI’s technology has been incorporated into Microsoft’s Bing search engine.

Could AI fuel another stock market bubble?

AI-linked shares rallied after ChatGPT became available to the public in late 2022, with Nvidia gaining well over 200% in the six months after its launch. The surge quickly prompted Wall Street commentators to question whether another technology bubble was taking hold. Stanley Druckenmiller, the well-known investor who has held sizeable positions in both Palantir and Nvidia, argued that bubbles never last only six months. In his view, if enthusiasm for AI were to turn into a bubble, extreme valuations would persist for at least two and a half years or longer, as they did during the DotCom bubble of the late 1990s. As of mid-2023, the best assessment was that the market was not in a bubble, at least for the time being. Although Nvidia was then valued at 27 times forward sales, analysts expected exceptionally strong revenue growth over the coming years. For comparison, the NASDAQ 100 traded at 60 times earnings at the DotCom bubble’s peak, against 25 times earnings in mid-2023.