Tech Sector Weighs on Wall Street Outlook
Wall Street is headed for a weaker start on Tuesday as investors continue trimming exposure to technology shares amid concerns that interest rates could stay higher for longer and that the massive capital required to support the artificial intelligence boom may become increasingly difficult to justify.
Nasdaq futures are leading losses following another sharp decline in SpaceX (NASDAQ:SPCX), while falling oil prices are also drawing attention as progress in U.S.-Iran negotiations eases fears over disruptions to global energy supplies.
At the same time, fresh deal activity in artificial intelligence and new government support for quantum computing highlight the intensifying race to secure leadership in next-generation technologies.
Nasdaq Futures Lead Market Lower
U.S. equity futures moved lower ahead of the opening bell, with technology stocks once again at the centre of the sell-off.
As of 4:33 a.m. ET, Nasdaq 100 futures were down 2.8%, while S&P 500 futures had fallen 1.45%. Dow Jones futures declined a more modest 0.7%.
The weakness reflects growing expectations that U.S. interest rates may remain elevated for longer than previously anticipated. Investors are also increasingly questioning whether the current pace of AI-related spending can be maintained indefinitely.
Having driven much of the market’s gains over the past year, technology and semiconductor stocks are particularly vulnerable to profit-taking and valuation reassessments.
SpaceX Pullback Continues
SpaceX (NASDAQ:SPCX) extended its decline after suffering a steep sell-off in the previous session.
The stock dropped 16.4% on Monday and fell another 2.9% in premarket trading.
The move followed a more cautious assessment from KeyBanc, which argued that the company’s valuation had become increasingly demanding following its powerful rally after going public.
Shares closed Monday at $154.59, only modestly above their IPO opening level of $150 and well below their recent peak above $225.
The decline erased roughly $400 billion in market value and has reignited debate over whether the company’s long-term growth prospects are sufficient to support its lofty valuation.
SpaceX also announced a senior notes offering and disclosed that it held more than $100 billion in cash and cash equivalents as of June 19.
Qualcomm Expands Its AI Ambitions
Qualcomm (NASDAQ:QCOM) is reportedly in advanced discussions to acquire AI chip startup Modular in a deal that could value the company at approximately $4 billion, according to Bloomberg.
The reported valuation is more than double the level achieved during Modular’s last funding round less than a year ago, underscoring the fierce competition for artificial intelligence assets.
Qualcomm has been expanding beyond its traditional smartphone business by targeting opportunities in data centres, AI and autonomous vehicles.
The company is also said to be exploring a separate acquisition involving AI startup Tenstorrent.
If completed, the transaction would further demonstrate how established technology firms are racing to strengthen their positions across the AI ecosystem.
Oil Prices Continue to Decline
Crude prices extended their losses after posting significant declines in the previous session.
Investors increasingly believe that progress in negotiations between Washington and Tehran could pave the way for additional Iranian oil supplies to reach global markets.
Sentiment improved after the United States issued a 60-day licence permitting the sale and import of Iranian crude and petroleum products as diplomatic discussions continue.
The move follows reports of progress toward a broader agreement and an extension of the current ceasefire arrangement.
Lower energy prices could help ease inflationary pressures, although prolonged weakness in crude markets may create challenges for energy producers.
Quantum Computing Gets a Boost
Quantum-computing stocks advanced after President Donald Trump signed a series of executive orders designed to accelerate the development of the technology in the United States.
The measures aim to deploy a research-capable quantum computer by 2028 and speed up the adoption of quantum-resistant cybersecurity systems across federal agencies.
Investors responded positively, lifting shares of companies including Infleqtion (NYSE:INFQ), Rigetti Computing (NASDAQ:RGTI), D-Wave Quantum (NYSE:QBTS) and IonQ (NYSE:IONQ).
IBM also moved higher after Trump praised Chief Executive Officer Arvind Krishna.
The initiatives signal growing recognition in Washington that quantum computing could become a strategically important technology over the coming decade.
Investors Look Beyond the AI Boom
While artificial intelligence remains the dominant theme across financial markets, investors are becoming increasingly selective about valuations and long-term growth assumptions.
Meanwhile, growing public-sector support for emerging technologies such as quantum computing suggests that the next wave of innovation may already be taking shape.
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