US100 loses 0,8% amid weakening AI stocks momentum 📉

US index futures are moving lower as investors reduce exposure to AI-related stocks. S&P 500 futures are down 0.5%, while Nasdaq 100 futures are losing more than 0.8%. Most pre-market losses are concentrated among companies tied to the AI infrastructure theme, which had posted substantial gains over recent weeks.

• The S&P 500 is at risk of ending its historic streak of 10 consecutive weeks of gains. Pressure on the technology sector intensified following Thursday’s sell-off in semiconductor stocks.

• Market sentiment weakened after Broadcom’s chip sales outlook failed to meet elevated investor expectations. As a result, market participants have started to reassess technology valuations following the powerful AI-driven rally.

• Investors are now awaiting the US May nonfarm payrolls report, due at 12:30 PM GMT, which could significantly influence expectations for the Federal Reserve’s policy path.

• The yield on the 10-year US Treasury remains near 4.47%, while a strong labor market reading could reinforce the “higher for longer” interest-rate narrative.

• Oil prices continue to find support from uncertainty surrounding Middle East negotiations and the ongoing risk of supply disruptions.

• The key themes heading into the end of the week remain the sustainability of the AI rally and whether incoming macroeconomic data will justify expectations for interest rates to stay elevated for longer.

US100 Chart (H1)

Looking at the US100 chart, the index has fallen below its 200-period exponential moving average (EMA200, red line) for the first time in nearly two weeks. RSI and MACD indicators have cooled, although the current pullback could still prove to be a standard 1:1 correction within the broader uptrend.  A move below the 29,750-point level could signal the risk of a deeper correction and a more pronounced loss of momentum in the technology sector.

Source: xStation5