Nasdaq futures fall nearly 1% as Asia-Pacific chip stocks plunge

Nasdaq futures fall nearly 1% as Asia-Pacific chip stocks plunge
US stocks midday brief | Thursday, 5 November 2026 (Hong Kong time; cash-market close refers to Wednesday, 4 November, US Eastern time; European markets opened at 16:00 Hong Kong time and had been open for about half an hour at publication; this edition uses pre-open futures and European opening reports)

On Wednesday, the Dow rose 3.03% to 53356.12 points, the S&P 500 gained 1.58% to 7688.62 points, the Nasdaq rose 1.44% to 25736.51 points, and the equal-weight S&P ETF (RSP) gained 1.86% to $223.33 (Reuters, republished) (Finnhub). Before midday, S&P 500 futures were down about 0.2%, Nasdaq 100 futures were down about 0.9% at roughly 28300 points, and Dow futures were up about 0.3%, extending the divergence; the VIX plunged 20.26% to 16.61 on Wednesday (Finnhub) (data compilation). The 10-year US Treasury yield was about 4.84%, WTI crude was around $87 a barrel, down another 1% or more on the day, spot gold was around $4130 an ounce, up more than 1% on the day, and the dollar index was around 101.25 (Reuters, republished) (data compilation).

Market themes
After Wednesday's rally on the “blue wave plus oil price plunge,” Thursday's midday market is splitting the bill: the old economy continues to benefit from falling oil prices, declining yields and a weaker dollar, with Dow futures still higher and European and Hong Kong stocks following suit. Meanwhile, risks are spreading across the AI chain: Nasdaq futures are down nearly 1%, Asia-Pacific chip stocks have plunged, South Korea's KOSPI closed down 5.3%, and the Nikkei fell 1.8%. The divergence suggests the market is trading a tug of war between two themes rather than the election result itself: “divided government restrains yields and lower oil prices curb inflation” versus “will AI construction be constrained?” Tonight's Bank of England decision, with markets expecting its first rate increase in more than three years, and US initial jobless claims, followed by tomorrow night's nonfarm payrolls, will determine which side prevails. Until payrolls, technology stocks will be more volatile than the broader market.

One. Futures and Europe: Dow futures rise, Nasdaq futures fall; Europe opens higher while Asia closes mixed

• The divergence in futures extends Wednesday's closing pattern: S&P 500 futures were down about 0.2% to around 7706 points, Nasdaq 100 futures fell 0.9% to around 28307 points, and Dow futures rose 0.3%; the Nasdaq 100 cash index at one point fell to 28062 points during the day (Finnhub) (data compilation). Rising Dow futures and falling Nasdaq futures suggest money has not left equities but is rotating from the AI chain into the old economy. On Wednesday, the Dow rose 3.03% while the Nasdaq gained only 1.44%; midday futures have widened that gap a little further.
• Europe opened following the “old economy” half of the US market: the FTSE 100 rose 1% to a three-month high, the CAC 40 gained 0.87%, the IBEX rose 0.86%, the Euro Stoxx 50 gained 0.3%, the STOXX 600 rose 0.43%, and the DAX opened flat (data compilation). Europe's gains are in areas benefiting from falling oil prices and yields, rather than AI—the other side of the same trade reflected in the divergence of US futures.
• Asia's closing split was more extreme than Europe's: South Korea's KOSPI closed down 5.28% at 5383.80 points, with a program-trading circuit breaker triggered at one point; regulators had previously acted to cool the heated AI rally. The Nikkei 225 closed down 1.79% at 61077.90 points, but the Topix rose 1.16%: 168 of the 225 constituents advanced, yet a handful of heavily weighted technology stocks dragged the index lower. The Hang Seng Index rose 3.82% to 24834.21 points during the session, while the Shanghai Composite edged up 0.10% to 3689.91 points (data compilation). The Nikkei and Topix moving in opposite directions, and the KOSPI falling while the Hang Seng rises, tell the same story: on Thursday, Asian markets are trading whether investors hold AI chip stocks, not the US election.
• The Bank of England is Europe's main event tonight: its decision is due at 20:00 Hong Kong time. Markets expect a 25-basis-point increase to 4.00%, the first in more than three years, on an expected vote of 7 to 2. Neil Wilson, UK investment strategist at Saxo Markets, said markets have priced in the first increase in more than three years; it could be a brief bout of precautionary tightening, but market pricing for four increases in this cycle is too hawkish (Sharecast). If the Bank of England raises rates as expected, it will be the first major central bank to tighten after the US election. That will test the market-wide bet that falling oil prices can contain inflation expectations.

Two. Bonds, dollar and commodities: yields continue to fall, oil drops for a fourth consecutive day, gold near another record high

• Bonds extended Wednesday's gains: the 10-year US Treasury yield was about 4.84%, below Wednesday's close of roughly 4.92%, while the dollar index was around 101.25 and continued to weaken (data compilation). The simultaneous decline in yields and the dollar suggests the market is still trading the idea that divided government restrains supply and lower oil prices curb inflation. Neither proposition has fresh evidence behind it yet; tonight's initial claims and tomorrow night's payrolls will be the first test.
• Oil fell for a fourth consecutive day. Reuters reported that Brent futures dropped 0.85% to $93.82 a barrel and WTI fell 1.36% to $86.92 a barrel. Both benchmarks plunged more than 8% on Wednesday to their lowest closes since 31 August, against a backdrop of bets that the midterm election result would reduce the risk of further escalation in the US-Israel war with Iran (Reuters, republished). Reuters also said Brent had fallen nearly 20% and WTI 15% so far this week, putting them on track for their biggest weekly losses since April 2020 (Reuters, republished). Four days of declines and a weekly loss heading for the largest since April 2020 suggest the war premium is unwinding faster than expected. But the faster it unwinds, the sharper a rebound could be if negotiations suffer a setback; that is why investors remain reluctant to buy energy stocks on Thursday after their 4.8% fall on Wednesday.
• Gold continued to strengthen: spot gold was around $4130 an ounce, up more than 1% on the day, after gaining 3.4% to $4061 on Wednesday, its largest one-day rise since mid-August (data compilation) (data compilation). Gold rising, the dollar falling and stock indexes diverging at the same time suggest this is not a safe-haven trade: a weak dollar gives gold a reason to rise without panic, while falling oil gives stocks and bonds a reason to rise without rate cuts.

Three. Stock and sector movers, including earnings: AppLovin surges more than 20% after hours; Qualcomm and Arm fall despite beating expectations

• AppLovin was the standout after hours: third-quarter revenue of $2.185 billion, up 55% year on year, beat expectations of $2.07 billion; earnings per share of $4.30 exceeded the expected $4.03; fourth-quarter revenue guidance of $2.365 billion to $2.395 billion topped the market's $2.25 billion forecast; and its buyback authorization increased by another $3.2 billion. Shares rose 23% to about $334 after hours. They had already gained 10.7% to $271.75 in Wednesday's regular session, but remained down about 60% for the year, making them the worst-performing S&P 500 constituent (Dow Jones, republished). AppLovin tells the opposite story to Qualcomm and Arm: all beat expectations, but AppLovin beat on guidance. The market now rewards only a next-quarter outlook far above expectations; however good the current quarter's figures are, they are merely the price of entry.
• The after-hours decliners were also numerous: Qualcomm fell 7.21% to $160.70, Arm lost about 5%, Snap dropped 11.49% to $5.24, MercadoLibre fell 6.26%, Expedia lost more than 7%, and Zillow fell more than 16%, while Coherent rose about 5% (Dow Jones, republished). The distribution of after-hours moves suggests the earnings-season reward logic has changed: beating expectations no longer automatically means a gain; guidance and cash flow are the yardsticks for pricing.
• Today's earnings schedule continues: Unity, ConocoPhillips and Kimberly-Clark report before the open, followed after the close, early on 6 November Hong Kong time, by Airbnb, Cloudflare and Atlassian (data compilation). Airbnb is a gauge of consumption and Cloudflare of AI infrastructure demand; tonight's after-hours results will test both legs of Wednesday's rebound.

Four. AI news: UBS and Citrini reach completely opposite conclusions on AI spending

• The divide among major firms over AI has become public after the election. UBS raised its global AI capital expenditure forecasts to $1 trillion in 2026 and $1.4 trillion in 2027, and introduced a $1.5 trillion forecast for 2028. It considers Democratic control of Congress unlikely to interrupt the AI investment cycle, with state-level rules, including the outcome in Texas, having a greater impact on individual data-center projects. It also warned that investors are paying closer attention to overinvestment, financing and monetization risks, that increased volatility could become the new normal, and identified the 2027 debt-ceiling negotiations as the clearest risk to US bonds (data compilation). Citrini Research argued in a report released Wednesday that growth in AI infrastructure investment has peaked: hyperscalers' annualized capital spending has approached $1 trillion, while revenue across the entire AI ecosystem is at least $200 billion. It said the gap is difficult to bridge, slowing backlog growth, massive debt issuance and AI service price cuts are all signs of pressure, and the risk-reward balance for AI infrastructure has shifted to the downside (data compilation). UBS and Citrini are looking at the same figures but reaching opposite conclusions: one bets demand remains and investments simply need to be selective; the other bets the return on investment no longer adds up. The Philadelphia Semiconductor Index fell 3.1% on Wednesday to a six-month low, suggesting the midday market is for now closer to the latter view.
• Asia's chip selloff is the debate playing out in real time: chip stocks led South Korea's KOSPI lower and a circuit breaker was triggered during the session; Advantest and Tokyo Electron led Nikkei declines, while SoftBank fell nearly 6% (data compilation). An earlier assessment by Scott Chronert, Citi's head of US equity strategy, is proving prescient: if the pace of data-center construction is delayed or changed, the fundamental trajectory of many suppliers will change. On Thursday, Asia-Pacific markets are trading that potential change in pace in advance.
• AMD is the only hard evidence in the bulls' hands, but it is weakening: after forecasting faster-than-expected growth in 2027 and a surge in data-center sales, AMD rose only 1% on Wednesday, having gained 7.6% in the previous day's after-hours session (Reuters, republished). Much of the positive effect of faster growth in 2027 has already been offset by concern that the pace of construction may slow. The driver of AI stock volatility is shifting from whether demand exists to whether construction can be completed on schedule.

Five. Forward calendar (Hong Kong time)

• 5 November (Thursday), 20:00: Bank of England rate decision; the market expects a 25-basis-point increase to 4.00%, its first in more than three years. 21:30: US initial jobless claims for last week and third-quarter productivity; speeches by Federal Reserve officials Hammack and Barkin. After the close, early on 6 November Hong Kong time: Airbnb, Cloudflare and Atlassian report earnings (Sharecast).
• 6 November (Friday), 21:30: US October nonfarm payrolls report (Bureau of Labor Statistics). A Reuters poll forecasts 65 thousand jobs added, following an increase of 29 thousand in September; unemployment is expected to hold at 4.2%. It is the week's key economic release (Reuters, republished).
• Note: The US has moved to standard time. Regular US stock trading corresponds to 22:30 to 05:00 the following day in Hong Kong. European cash-market gains during the session were not yet available for this edition; the evening brief will use closing figures ([no additional source]).