As Chip Stocks Face Pressure, S&P 500 Futures Decline – Europe Market Wrap

Stock futures pointed to a drastically lower opening for Wall Street, with tech companies in particular hurt by a slew of dismal earnings and new hints of Chinese innovation in AI.

Contracts on the Nasdaq 100 lost 1.4%, while those on the S&P 500 sank 1%. Europe’s Stoxx 600 index fell 0.6%, reflecting dramatically higher bond yields across the continent following Germany’s declaration earlier this week that it would increase spending by hundreds of billions of Euros. Auto stocks defied the trend, however, after Trump granted the industry a one-month reprieve from tariffs imposed on Mexican and Canadian imports.

Germany’s spending proposal pushed Bunds to their lowest levels since 1990 on Wednesday, and the selloff continued on Thursday. The changes reverberated throughout the eurozone and beyond, with Japanese 10-year borrowing prices reaching their highest level in more than a decade and Treasury yields jumping 3 bps.

Investors are now waiting for the ECB’s meeting, which is expected to result in a 25 bps cut and could provide insight into how rate-setters will respond to the increased spending plan.