US stock index futures were mixed on Friday as a pullback in major chipmakers weighed on sentiment before the May employment report, a key test for investors trying to judge the Federal Reserve’s next move.
Technology shares came under pressure after a strong rally, while traders also weighed inflation risks linked to higher energy prices and renewed geopolitical tension.
Futures tied to the S&P 500 fell 0.49%, while Nasdaq 100 futures slid 1.02% as technology shares came under pressure. Dow futures, however, edged up 36 points, or less than 0.1%.
5 things to know before Wall Street opens
1. Chipmakers lead the premarket retreat
Semiconductor stocks were the main drag on US equity futures, with investors taking profits after a powerful run in artificial intelligence-linked names.
Nvidia fell 1.5% in premarket trading, while Intel, Micron, AMD and Broadcom dropped between 2% and 3.8%.
The move suggested traders were reassessing momentum in a sector that has been central to Wall Street’s rebound from March lows and its push towards record highs.
Chip stocks have benefited from expectations that AI spending will continue to accelerate across data centres, cloud computing and enterprise software.
But the scale of the rally has also left the group vulnerable to disappointment, particularly when positioning becomes crowded.
2. May payrolls could shape Fed rate expectations
The main event for markets is the US Labor Department’s May nonfarm payrolls report, due at 8:30 am ET.
Economists expect the economy to have added 85,000 jobs in May, down from 115,000 in April.
That would point to a slower but still stable labour market, giving investors another signal on whether the Fed can keep rates steady or will need to maintain a more restrictive stance.
The unemployment rate is expected to remain in focus alongside wage growth.
A stronger-than-expected jobs report could reinforce the view that the labour market remains resilient, keeping inflation pressure alive and limiting the case for rate cuts.
3. S&P 500 risks first weekly decline since April
If current losses hold, the S&P 500 is set for its first weekly decline since April.
The Nasdaq was also on track to end the week slightly lower, while the price-weighted Dow was headed for a third straight weekly gain.
That split shows how narrow the pressure has become.
Technology and semiconductor names are bearing the brunt of the selling, while some defensive and industrial stocks have helped limit losses elsewhere.
4. Corporate movers add to the caution
Away from semiconductors, single-stock moves also shaped the premarket tone.
Lululemon Athletica slumped nearly 12% after the athletic apparel maker cut its annual profit forecast and guided second-quarter earnings well below Wall Street estimates.
The move added to concerns about consumer demand and pressure on discretionary spending.
Cooper Companies moved in the opposite direction, rising 4.8% after the contact lens maker beat estimates for second-quarter results.
5. Geopolitics remain in the background
Geopolitical risks continued to simmer as investors prepared for the jobs report.
Hezbollah rejected a new Lebanon ceasefire, while Israel said it would keep troops in place. That dealt a blow to US President Donald Trump’s efforts to end the fighting and advance talks with Tehran.
The conflict matters for markets because of its potential impact on oil prices, inflation expectations and central-bank policy.
Higher energy prices can make it harder for inflation to cool, complicating the Fed’s task at a time when investors are already debating whether rates will remain elevated for longer.
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