Nasdaq Futures Fall 1%: AI Rout Deepens on Debt Fears

Quick Answer: Nasdaq futures fell 1% as the AI rout deepened on debt concerns. The Nasdaq 100 E-minis lost 331.5 points, or 1.1%, at 5:50 am after hotter-than-expected inflation data raised expectations of more US Federal Reserve rate hikes. For Malaysian investors, the pressure is on US AI and cloud names where bond yields have hit record highs, so their exposure is worth checking.

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Nasdaq futures slid as the AI rout deepened, with investors weighing heavy borrowing by AI infrastructure operators. The Nasdaq and S&P 500 had just posted their biggest one-day drop since July on Wednesday. Here are the numbers behind the sell-off.

Why Did Nasdaq Futures Fall After the Inflation Data?

Nasdaq futures fall as AI rout deepens on debt concerns — Nasdaq futures slid as the AI rout deepened on debt concerns.

Hotter-than-expected inflation data fuelled expectations of more rate hikes from the US Federal Reserve. That sent tech stocks tumbling on Wednesday.

At 5:50 am, Nasdaq 100 E-minis lost 331.5 points, or 1.1%. S&P 500 E-minis fell 21 points, or 0.27%, while Dow E-minis rose 165 points, or 0.32%.

Traders priced a 27% chance of a Fed rate hike later this month, up from 20% a week ago, according to CME Group’s FedWatch tool. The odds of a 25-basis-point hike in December stood at 67%.

What Happened to CoreWeave and Oracle Bonds?

CoreWeave, a heavily indebted data-centre operator, fell 15% on Wednesday. It dropped another 6.3% in premarket trading on Thursday.

Oracle fell nearly 9% in the previous session and slipped a further 2.1%. The companies’ bonds also came under pressure, pushing their yields to record highs.

Which AI and Chip Stocks Slipped on TSMC’s Cautious Outlook?

TSMC, the world’s largest manufacturer of advanced chips, reported its sixth consecutive record quarterly profit. It struck a cautious note for 2027 due to macroeconomic uncertainties.

Reports that AI lab Anthropic posted a 45% surge in third-quarter revenue compared to the previous quarter failed to lift spirits. Nvidia fell 1.8%, Micron Technology dropped 3.7% and Advanced Micro Devices lost 2.3%.

Rocket Lab shares dropped 9.7% after the space company said the inaugural launch of its larger Neutron rocket was delayed until next year.

Can Q3 Earnings Offset the Tech Selloff?

The Nasdaq has dropped more than 3% from the record highs it touched last week. Analysts expect S&P 500 profits to grow 30.6% in the third quarter, according to LSEG data.

Technology and energy companies are doing the heavy lifting in that forecast. Jefferies economist Mohit Kumar said a slowdown in the AI infrastructure build-out would imply a sharp slowdown in US growth expectations. Jefferies expects earnings and demand to hold up, and said it would look to take some chips off the table ahead of the midterm election.

Which US AI Names Should Malaysian Investors Monitor?

The source report names no Bursa Malaysia-listed company, so the read-across to local holdings is indirect. Investors with US tech exposure through a Malaysian broker may want to watch these triggers:

CoreWeave debt levels and its bond yields after a 15% fall on Wednesday
Oracle bond pressure following its nearly 9% drop in the previous session
TSMC guidance for 2027, after its sixth consecutive record quarterly profit
Nvidia, Micron Technology and AMD share moves, which fell 1.8%, 3.7% and 2.3%
Producer price data at 8.30am and the Fed rate-hike odds tracked on CME FedWatch

Disclaimer: This article is for general information only and is not financial advice. Do your own research before making any investment decision.

Key Takeaways

Nasdaq 100 E-minis lost 1.1% at 5:50 am after hotter-than-expected inflation data.
Traders priced a 27% chance of a Fed hike this month, up from 20% a week ago.
CoreWeave fell 15% on Wednesday, with its bonds pushing yields to record highs.
TSMC’s sixth consecutive record quarterly profit came with a cautious 2027 outlook.
Analysts expect S&P 500 profits to grow 30.6% in the third quarter, per LSEG data.

Frequently Asked Questions

Why did Nasdaq futures fall this week?

Nasdaq futures fell because hotter-than-expected inflation raised expectations of more Fed rate hikes, while debt concerns hit AI infrastructure stocks. The Nasdaq 100 E-minis lost 1.1% at 5:50 am.

What are the odds of a Fed rate hike this month?

Traders priced a 27% chance of a central bank rate hike later this month, according to CME Group’s FedWatch tool. That is up from 20% a week earlier, and the odds of a 25-basis-point hike in December stood at 67%.

Why did CoreWeave shares fall?

CoreWeave, a heavily indebted data-centre operator, fell 15% on Wednesday and another 6.3% in premarket trading on Thursday. Its bonds also pushed yields to record highs.

Did TSMC’s record profit lift chip stocks?

No, TSMC’s sixth consecutive record quarterly profit did not lift the sector because it struck a cautious note for 2027. Nvidia fell 1.8% and Micron Technology dropped 3.7% in the same session.

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