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U.S. stock futures were struggling for direction early Wednesday, with markets reeling after a weak profit outlook from chip equipment manufacturer ASML caused investors to question if demand for artificial intelligence-related products can carry on growing at such a rapid pace.
Dow Jones Industrial Average futures fell 30 points, or 0.1%, while S&P 500 futures were flat after both indexes snapped winning streaks in the previous session. Contracts tied to the Nasdaq 100 edged up 0.1%–but the tech-heavy gauge will need to do much better than that to pare back its losses from Tuesday, when it slid 1.4%.
The selloff came after ASML’s earnings were briefly made available on the company’s website a day early, and then published in full by noon. The Dutch company forecast weaker-than-expected sales numbers for 2025, which the market quickly jumped on as a sign that demand for semiconductors is slowing after two years of AI-powered growth.
“Some rare weakness has come through in risk over the last 24 hours,” Deutsche Bank’s global head of macro research Jim Reid said in a morning research note. “That followed significant disappointment among chipmakers after ASML’s earnings were beneath expectations, whilst energy stocks also took a hit from the latest decline in oil prices.”
The shift in sentiment dragged on Asian stocks overnight. Shares in chip equipment maker Tokyo Electron tumbled 9.2% and the flagship indexes of both Japan and South Korea traded in the red.
It’s tough to see many catalysts that could spark a comeback for U.S. stocks on Wednesday, although Morgan Stanley’s third-quarter earnings could help cement the idea that consumer spending is holding up despite years of elevated interest rates. Its Wall Street peers Bank of America, Citigroup, and Goldman Sachs all beat analysts’ forecasts on Tuesday, although their better-than-expected results were quickly overshadowed by ASML’s gloomy outlook.
Oil pared back some of its recent losses as traders continued to fret about the impact any escalation in the Middle East could have on supply, even after Israel told the U.S. it wouldn’t target Iran’s production facilities. The Brent international benchmark climbed 0.8% to $74.87 a barrel, while West Texas Intermediate U.S. prices were up 1% to $71.25 a barrel.
Bond yields were down slightly over the past 24 hours, with the yield on the 10-year U.S. Treasury note at 4.020% and the 2-year note yielding 3.942%.
