US Stock Futures Slip as AI Spending Fears, Fed Decision Weigh on Markets

U.S. stock futures declined during Asian trading on Tuesday as investors grew increasingly cautious over artificial intelligence (AI) spending, weak semiconductor sentiment, and the upcoming Federal Reserve interest rate decision.

S&P 500 Futures fell 0.3% to 7,424.50, while Nasdaq 100 Futures dropped 1% to 27,902.25. Dow Jones Futures traded little changed at 52,396. The cautious mood followed mixed Wall Street performance on Monday, when the Dow Jones Industrial Average gained 0.5%, the S&P 500 finished nearly flat, and the Nasdaq Composite slipped 0.2% as chip stocks came under pressure.

The weakness spread across Asian markets, with South Korea’s KOSPI plunging more than 10% and Japan’s Nikkei 225 falling nearly 4%. Samsung Electronics and SK Hynix each tumbled almost 14%, reflecting growing investor concerns over China’s rapid semiconductor progress. Market sentiment was rattled by the successful market debut of Chinese memory chipmaker CXMT and advances in domestic immersion deep ultraviolet (DUV) lithography technology, raising fears of stronger competition in the global chip industry.

Nvidia shares fell about 5% after reports indicated its AI-related financing commitments had exceeded $750 billion, fueling concerns that aggressive AI infrastructure spending may become difficult to sustain. Investors are now closely watching quarterly earnings from Microsoft, Meta Platforms, Apple, and Amazon later this week for fresh insights into AI investment trends and whether those massive expenditures are translating into stronger profits. Recent earnings from Tesla and Alphabet also highlighted elevated AI spending, reinforcing concerns about rising capital costs.

Attention is also turning to the Federal Reserve’s two-day policy meeting, which concludes Wednesday. While markets largely expect the central bank to keep interest rates unchanged, traders continue to monitor Chair Kevin Warsh’s remarks for signals on future monetary policy. According to CME FedWatch data, markets currently assign roughly a 38% probability of a rate hike this week and an 80% chance of another increase in September.

Elsewhere, oil prices extended losses after President Donald Trump said the United States was making progress in negotiations with Iran, raising hopes for a diplomatic resolution while warning military action could resume if talks fail.

Among individual stocks, Johnson & Johnson announced a proposed $5.5 billion settlement covering most of its remaining ovarian talc lawsuits, while the Federal Aviation Administration proposed inspections of passenger seat installations on hundreds of Boeing 737 MAX aircraft after identifying potential safety concerns.