US equity futures traded below the flatline early Tuesday as investors worked through Apple's latest quarterly report and turned their attention to the American midterm elections, CNBC reported.
Dow Jones Industrial Average futures were down 0.46%, while S&P 500 futures lost 0.14%. Nasdaq-100 futures sat just under breakeven, according to CNBC, as global technology shares came under pressure.
Apple shares slipped 2% in extended trading after the company issued a margin forecast that disappointed and reported fiscal fourth-quarter iPad sales that fell short of analyst estimates, CNBC reported.
Why it matters
The session follows a split regular trading day in the US, where the tech-heavy Nasdaq Composite dropped 1.07% and the S&P 500 shed 0.51% as money continued to move out of technology names. The Dow Jones Industrial Average bucked the trend, gaining about 214 points, or 0.41%, per CNBC.
The weakness in tech has been the dominant theme, and Tuesday's calendar keeps the sector in focus. Advanced Micro Devices and Super Micro Computer are both due to report after the close, while a long list of companies including Pfizer, Shopify, Eaton and Marathon Petroleum were scheduled to release results before the opening bell, according to CNBC.
Deal news and AI financing hit individual names
Several single stocks moved sharply on corporate announcements. Marvell Technology fell about 12% and Lumentum dropped 18% after Marvell said it would buy Lumentum in a $115 billion transaction, CNBC reported.
Oracle shares declined 8% after the company disclosed plans to raise $10 billion through a common stock sale and another $10 billion in bonds to help fund its artificial intelligence build-out, according to CNBC.
The moves came as investors weighed the gap between what technology firms are spending on AI infrastructure and the revenue those investments are expected to generate. Willem Sels, chief investment officer at HSBC, told CNBC's "Squawk Box Europe" that current earnings remain strong and the business cycle still looks healthy, and that the market's unease centers on that spending-to-revenue mismatch rather than any broad deterioration in credit conditions.
"It's a wild ride. It's a concentrated ride as well, so whenever there is news around the AI cycle, people can take important decisions," Sels said, according to CNBC. He added that demand for AI should keep climbing steeply in HSBC's view.
Elections take center stage
Prediction market traders see roughly a 75% probability that Democrats win the Senate, CNBC reported. JPMorgan has warned that a Democratic sweep of both the House and Senate could trigger a sell-off in artificial intelligence stocks.
Even with President Donald Trump in the White House, a Democratic win in either chamber would shape congressional investigations and oversight in Washington — a factor that matters for sectors such as defense, artificial intelligence and healthcare, according to CNBC.
Ryan Detrick, a CNBC contributor and chief market strategist at Carson Group, told the network that some nervousness typically builds before a vote and that markets have historically fared well once the results are in. He also cautioned that a lopsided outcome for either party tends to unsettle investors, citing concerns about concentrated spending and power.
Global tech sell-off spreads
The pressure was not confined to the US. European semiconductor names fell in early trade, with ASML down 3.4%, ASMI off 2.1%, and STMicroelectronics and Infineon Tech each down 3.9%, CNBC reported. The regional Stoxx 600 opened 0.62% lower, with the technology sector down 2.1% and mining stocks off 2.2%. Food and beverage and healthcare shares were the only gainers, each up about 0.3%.
In Asia, losses were led by technology-heavy markets. South Korea's Kospi closed 3.59% lower at 5,648.79, while the small-cap Kosdaq fell 4.08% to 704.39, according to CNBC. Taiwan's weighted index also dropped 3.59% to 43,307.54, and mainland China's CSI 300 ended 0.2% down at 4,008.87. Australia's S&P/ASX 200 was the outlier, adding 0.34% to close at 8,886.8, and Hong Kong's Hang Seng Index was up 0.37% in its final hour of trade.
Separately, German auto parts and machinery maker Schaeffler said it would eliminate 3,460 jobs and shut five sites across Europe, with about 2,660 of the cuts and four of the closures in Germany. The company attributed the move to overcapacity amid weaker demand for combustion-engine vehicles and a slower-than-expected shift to electric vehicles, and said it expects one-off costs of 480 million euros ($537.2 million) alongside an annual earnings boost of roughly 400 million euros from 2030. Schaeffler also reported a 0.2% year-on-year decline in revenue to 5.8 billion euros.
What to watch
On the economic side, traders await the September Job Openings and Labor Turnover Survey and factory orders data, with earnings from AMD and Super Micro Computer due after the close and midterm election results expected to set the tone for the rest of the week.
