US stock futures pointed higher on Monday as semiconductor stocks recovered ground following last week’s sharp technology sector sell-off.
Shares in Nvidia, Broadcom and Micron Technology rose between 1.5% and 3.9% in premarket trading, rebounding after a brutal session on Friday that erased more than US$1 trillion in market value across the semiconductor sector.
The recovery comes after investors reassessed last week’s decline, which was triggered by Broadcom’s weaker-than-expected outlook and intensified by concerns that the Federal Reserve could raise interest rates to combat inflationary pressures linked to the ongoing Iran conflict and higher energy prices.
Futures indicated a positive start for the major US indices, with the S&P 500 up 0.4% and the Nasdaq 100 rising 0.7% ahead of the opening bell. The Dow Jones Industrial Average was marginally lower, down 0.1%.
Despite recent volatility, market participants remain broadly optimistic about the long-term outlook for artificial intelligence and the semiconductor companies powering the sector’s growth.
Mark Haefele, Chief Investment Officer at UBS Global Wealth Management, said: “We do not expect investors to lose confidence in the AI outlook. Although tech stocks have come under pressure in recent days amid concerns about whether expectations can be met, business fundamentals remain strong.”
The rebound suggests investors may view last week’s sell-off as a valuation reset rather than a fundamental change in the outlook for AI-related businesses.
Technology and semiconductor stocks have been among the strongest performers in global markets over the past two years, driven by surging demand for AI infrastructure, data centres and advanced computing chips.
Investors will now be watching closely to see whether the recovery can be sustained as markets continue to balance strong corporate fundamentals against concerns over interest rates, inflation and geopolitical tensions.
