NASDAQ 100 futures indicate a positive start for US markets on Monday, with tech stocks leading the recovery after a challenging previous week. Shares of Nvidia, Broadcom, Micron Technology, Advanced Micro Devices, and Intel Corporation rose over 4% in pre-market trading, signaling renewed investor confidence.
- NASDAQ 100 futures surged more than 340 points (1.1%) on Monday.
- Bond yields fell to 5.06%, reducing pressure on tech stocks.
- Tech stocks had faced significant selling pressure last week, with chip stocks dropping up to 20%.
- Investors shifted focus to defensive stocks like Walmart and Coca-Cola during the downturn.
- Asian markets showed mixed results, with Japan down 0.5% and Korea's Kospi up 1.4%.
Why did NASDAQ 100 futures rise on Monday?
The rise in NASDAQ 100 futures was driven by easing concerns over borrowing costs after Federal Reserve Chairman’s dovish remarks. These comments boosted investor confidence, leading to a rebound in tech stocks that had fallen sharply the previous week. Additionally, bond yields dropped to 5.06%, which helped reduce the selling pressure on technology shares.
How did tech stocks perform last week?
Last week, tech stocks experienced significant declines. The NASDAQ 100 index suffered its sharpest weekly fall since March 2025, losing 5.49% of gains from the previous week. Chip stocks were hit hard, with some dropping as much as 20%. Key companies like NVIDIA, Alphabet, Amazon, Tesla, SpaceX, and Meta Platforms saw losses ranging from 2.4% to 11.6%. In contrast, Apple and Microsoft were the only major tech gainers, rising 3.4% and 0.1% respectively.
What caused the tech stock sell-off?
The sell-off was mainly due to concerns about rising borrowing costs, which affect the cash flow of AI hyperscalers and companies in the AI ecosystem. Investors also worried about the high valuations of AI stocks after CoreWeave’s creditworthiness sharply declined, signaling potential risks in the sector.
How did investors respond to the market changes?
During the downturn, investors rotated their investments from tech stocks to defensive stocks such as Walmart, Coca-Cola, and Home Depot. These defensive stocks surged over 6% for the week, reflecting a cautious approach amid market uncertainty.
What was the performance of Asian markets?
Asian markets had a mixed start to the week. The Japanese market closed down by 0.5%, while South Korea’s Kospi index rebounded strongly, rising 1.4%. Meanwhile, the Indonesian stock market continued its decline, falling 5% on Monday after an 11% drop on Friday. This was influenced by Indonesia’s reclassification to standalone market status by MSCI.
Frequently Asked Questions
Q: What are NASDAQ 100 futures?
A: NASDAQ 100 futures are financial contracts that represent the expected future value of the NASDAQ 100 stock index. They help investors predict market trends and make trading decisions before the stock market opens.
Q: Why do bond yields affect tech stocks?
A: Bond yields influence borrowing costs. When yields rise, it becomes more expensive for companies, especially tech firms, to borrow money, which can reduce their growth potential and stock prices. Lower yields ease these costs, often boosting tech stocks.
Q: What are defensive stocks?
A: Defensive stocks belong to companies that provide essential goods and services, such as food and household products. These stocks tend to be more stable during market downturns because demand for their products remains steady.
