US stock market today: Nasdaq, S&P 500 futures drop up to 1% as investors rotate out of chip stocks

The US stock market is set to open lower on Friday, 5 June, as investors rotated out of chip stocks and into non-tech sectors. Futures tied to the S&P 500 slipped 0.5%, while Nasdaq futures plunged more than 1%. Meanwhile, futures linked to the Dow Jones Industrial Average were up 63 points, or 0.1%.

The rally in chip stocks, which had powered Wall Street to multiple record highs, came to a halt in Thursday’s session after Broadcom’s fiscal second-quarter numbers and its decision not to raise AI revenue expectations for fiscal 2026 and 2027 disappointed Wall Street investors.

The weaker outlook also dragged several chip stocks lower, prompting investors to shift back toward sectors such as financials and consumer stocks.

Meanwhile, the S&P 500 was down 0.4% for the week, and if it finishes lower, the benchmark will miss out on a 10th straight week of gains, which would have marked its longest winning streak since 1985.

Investors are also looking for signs of progress in the US-Iran peace talks, while uncertainty persists over a ceasefire between Israel and Lebanon. Earlier this week, the fragile ceasefire between Iran and the US came under pressure after both nations exchanged attacks, although leaders from both sides expressed optimism that negotiations were still underway.

US President Donald Trump said talks with Tehran were progressing well, despite Iran-backed Hezbollah rejecting a US-brokered ceasefire proposal.

In the bond market, Treasuries were little changed ahead of Friday’s jobs report for May, with the 10-year yield at 4.47%. The dollar was also headed for its biggest drop in more than a week.

“A strong number would reinforce concerns that the Federal Reserve could lean toward tighter policy at its meeting later this month, while a weak print would feed worries about a cooling labour market. With AI leadership wobbling, oil unsettled and the Fed in play, the rotation seen on Thursday may be a preview of a choppier stretch ahead,” said domestic brokerage firm Vested Finance.

The Labour Department is expected to report on Friday that companies, non-profits, and government agencies added 105,000 jobs last month, according to an AP report citing a survey of forecasters by data firm FactSet.

Hiring has bounced back this year from a weak 2025, showing unexpected resilience despite economic uncertainty and persistently high energy prices triggered by the Iran conflict.

The data comes ahead of new Federal Reserve Chair Kevin Warsh’s first policy meeting later this month, as he takes charge of an economy grappling with elevated inflation—partly exacerbated by the Middle East conflict—and a subdued labour market marked by layoffs and slower hiring.

Crude prices remain flat

Crude oil prices were trading flat after dropping 3% in the previous session, weighed down by hopes that the US and Iran could still find a diplomatic solution to end the conflict and reopen the Strait of Hormuz.

Brent crude futures traded near $95 per barrel, while WTI crude oil futures hovered around $93 per barrel. Although prices remained largely unchanged in Friday’s session, crude oil was still up more than 6% for the week.

However, the risks have not completely faded. US-Iran negotiations remain stalled, with Iran suspending talks in response to Israeli military activity in the region, keeping energy prices highly sensitive to any further escalation.

US stocks in focus today

Among individual stocks, Nvidia fell 1.5% in premarket trading, while Intel, Micron, AMD, and Broadcom declined between 2% and 3.8%. Cooper Companies rose 5.6% after the contact lens maker beat estimates for its second-quarter results.

Among other major movers, Lululemon Athletica slumped nearly 12.5% after the athletic apparel maker cut its annual profit forecast and projected second-quarter earnings well below Wall Street estimates.

Disclaimer: We advise investors to check with certified experts before making any investment decisions.