Stocks Drop as Tech Earnings, Bond Selloff Weigh: Markets Wrap

(Bloomberg) — Stock futures signaled a sharply weaker open for Wall Street, with tech stocks in particular hit by a raft of disappointing earnings and further signs of Chinese innovation in artificial intelligence.

Contracts on the Nasdaq 100 fell 1.4% while those on the S&P 500 dropped 1%. Marvell Technology Inc. shares were among the biggest premarket losers, dropping about 15%, after the chipmaker’s result and revenue forecast failed to live up to investors’ lofty expectations. CrowdStrike Holding Inc. tumbled after the cybersecurity company issued a worse-than-expected earnings outlook. MongoDB Inc. dropped 17% after the database software company gave a disappointing forecast.

Chip shares came under renewed pressure after Alibaba Group Holding Ltd. introduced its Qwen platform, a model that it claims performs as well as Chinese start-up DeepSeek but with a fraction of the data. The news, alongside the underwhelming earnings, are denting investor confidence in US companies’ dominance in AI.

“Clearly Alibaba is weighing on sentiment,” said Alexandre Hezez, chief investment officer at Group Richelieu in Paris. “The tech sector has been weakened lately, if you combine that with Marvell, it’s a pretty sour cocktail for US stocks”

Europe’s Stoxx 600 index slipped 0.6%, reacting to sharply higher bond yields across the continent, following Germany’s announcement earlier this week that it would deploy hundreds of billions of euros in additional spending. Auto shares bucked the trend, however, after President Donald Trump offered the sector a one-month reprieve from the tariffs levied on Mexican and Canadian imports.

Germany’s spending plan drove Bunds on Wednesday to their worst session since 1990 and the selloff extended on Thursday. The moves rippled into markets across the euro area and beyond, with Japanese 10-year borrowing costs earlier reaching the highest in over a decade and Treasury yields rising three basis points.

Investors are now waiting for the European Central Bank’s meeting, which is expected to deliver a 25 basis-point interest rate cut, and could yield clues on how rate-setters might react to the additional spending plan.