Tech stocks expected to lead declines at the open
U.S. equity futures traded lower on Tuesday, indicating a weaker start for Wall Street as investors looked set to trim exposure following Monday’s rally. Technology shares were expected to be the main drag after renewed concerns about artificial intelligence spending weighed on the semiconductor sector.
Samsung sell-off sparks broader chip weakness
Market sentiment deteriorated after South Korean chipmaker Samsung Electronics suffered a near 7% decline despite reporting a 19-fold increase in second-quarter operating profit.
The market reaction suggested investors remain cautious about whether the rapid pace of AI-related investment can be maintained.
“Although Samsung’s results were stellar, investors are getting nervous about the scale of money ploughing into AI and whether it’s a bubble waiting to burst,” said Dan Coatsworth, head of markets at AJ Bell.
Chip stocks also faced fresh pressure after Reuters reported that Chinese AI startup DeepSeek is working on its own artificial intelligence processor, potentially reducing future dependence on established chip suppliers.
Strong finish on Monday
Wall Street ended Monday’s session with broad-based gains following the Independence Day holiday.
The Nasdaq Composite rose 288.49 points, or 1.1%, to 26,121.16, while the S&P 500 gained 54.19 points, or 0.7%, to finish at 7,537.43. The Dow Jones Industrial Average added 155.84 points, or 0.3%, ending at a record closing high of 53,055.91.
Hardware stocks led the rally
Technology companies drove most of Monday’s advance, with computer hardware names posting the strongest gains.
The NYSE Arca Computer Hardware Index climbed 3.4%, helped by a 4.4% rise in Dell Technologies (NYSE:DELL) after President Donald Trump highlighted the company’s computers during an Oval Office event.
The NYSE Arca Networking Index gained 2.8%, while the Philadelphia Semiconductor Index advanced 2.2%.
Elsewhere, brokerage firms, banks and steel producers also moved higher, while pharmaceutical, telecommunications, housing and utility stocks lagged the broader market.
Services activity remains in expansion territory
Economic data showed the U.S. services sector continued to grow in June, although at a slightly slower pace.
The Institute for Supply Management reported its Services PMI eased to 54.0 from 54.5 in May, matching market expectations. Any reading above 50 signals continued expansion.
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