Nasdaq futures plunge 240 points: 5 things to know before Wall Street opens

• Micron plunged 4.6% in premarket trading, Applied Materials fell 3.5%, and Nvidia dropped 1.1% as the Philadelphia Semiconductor Index entered bear market territory with a 20% decline from June highs
• China's reported mass production of domestically developed deep-ultraviolet chipmaking equipment heightened concerns about pricing power erosion for established suppliers
• The Federal Reserve decision is due Wednesday at 2 pm ET, with markets assigning a 37.4% probability to an immediate rate increase while oil fell 2.8% to ease some inflation pressure

Market Summary: Nasdaq Futures Plunge on AI Investment Concerns

Key Market Movements:

Nasdaq 100 futures fell 0.83% (240 points) while S&P 500 futures declined 0.10% and Dow futures gained 0.28% (145 points). The Philadelphia Semiconductor Index has entered bear market territory, down over 20% from its June peak.

Major Stock Declines:

• Micron: -4.6% (premarket)
• Applied Materials: -3.5%
• Nvidia: -1.1%

The sell-off followed severe losses in Asian markets, with South Korea's Kospi plunging 10.8%.

Primary Concerns:

Investors are questioning whether hundreds of billions in AI infrastructure spending can generate returns quickly enough to justify current valuations. Additional pressure comes from reports that China has begun mass production of domestically developed chipmaking equipment, threatening pricing power of established suppliers.

Critical Earnings Ahead:

Big Tech must defend AI investments with results this week:

• Microsoft and Meta: Wednesday after close
• Amazon and Apple: Thursday

Markets will scrutinize cloud growth, capital expenditure, and evidence that AI products generate revenue offsetting infrastructure costs.

Fed Decision:

The Federal Reserve announces its decision Wednesday at 2 PM ET. Markets assign 37.4% probability to an immediate rate increase, with at least 25 basis points of tightening expected by year-end.

Counterbalancing Factors:

Oil prices fell 2.8% to one-week lows on the US-Iran pause, easing some inflation pressure, though regional drone incidents maintain energy infrastructure concerns.

Market Implications:

Technical damage in semiconductor stocks suggests rebounds may attract sellers until earnings reset expectations for AI demand and infrastructure spending.