Key facts
- US stock index futures declined as semiconductor stocks fell.
- Nvidia, Intel, Micron, AMD, and Broadcom declined in premarket trading.
- The May employment report is expected to show 85,000 jobs added.
- Lululemon Athletica cut its annual profit forecast, causing its stock to slump.
- Cooper Companies beat second-quarter estimates, leading to a stock increase.
U.S. stock index futures declined on Friday as semiconductor stocks lost momentum following a strong rally, and investors adopted a cautious stance ahead of the May employment report. The report is expected to influence the Federal Reserve's policy decisions. Nvidia, the largest company by market value, fell 1.5%, while Intel, Micron, AMD, and Broadcom dropped between 2% and 3.8% in premarket trading. These semiconductor gains had been instrumental in Wall Street's recovery and push to record highs. Barclays strategist Emmanuel Cau noted that momentum in AI/Semis feels shaky due to crowded positioning, upcoming IPO liquidity events, and policy risks. The Labor Department's May employment data is anticipated to show 85,000 nonfarm payroll additions, consistent with a stable labor market. Deutsche Bank strategist Jim Reid suggested that a decent labor market would keep the focus on inflation, which has risen above the Fed's target due to energy shocks. Money markets anticipate the Fed will keep rates unchanged into next year. Citi is trimming its equity exposure after a strong run, citing rising inflation and positioning risks, though maintaining a constructive long-term view on U.S. equities driven by AI earnings. Lululemon Athletica slumped nearly 12% after cutting its annual profit forecast, while Cooper Companies rose 4.8% after beating second-quarter estimates. European bourses started the session mixed, with the tech-heavy Nasdaq futures underperforming. Global tech continued to sell off after Broadcom's AI chip revenue guidance fell short of expectations. G10 currencies firmed against the dollar ahead of the US Jobs report.