U.S. stock futures pointed in different directions Thursday morning, with chip stocks pulling the Nasdaq $NDAQ lower while a strong UnitedHealth $UNH earnings report lifted the Dow.
Nasdaq 100 futures were off 0.7% and S&P 500 futures edged down 0.2%. Dow futures advanced about 145 points, or 0.3%, as UnitedHealth stock rose 4% following a better-than-expected earnings report. Oil prices held relatively steady, with Brent crude at $84.60 per barrel, down 0.4%.
Chip stocks were among the hardest-hit sectors. The VanEck Semiconductor ETF gave up 2.2%, with Arm Holdings off 4% and Taiwan Semiconductor down 3.9%. The selling extended into Europe, as ST Microelectronics retreated 3%, Dutch firm ASMI lost nearly 2.9%, and Germany's Infineon Technologies declined 2.8%.
The session's pressure originated in Asia, where SK Hynix cratered 11% in Seoul and the broader Kospi tumbled more than 6%. Taiwan Semiconductor's fifth consecutive quarter of record results offered little comfort to a sector already in retreat. Sandisk, Western Digital $WDC, and Micron $MU were among the biggest decliners before the opening bell.
Thursday's premarket pressure came after stocks broadly rallied on Wednesday. A U.S. producer price index report that came in below forecasts buoyed hopes that inflation is easing, and better-than-expected results from large banks gave investors further confidence in corporate profits. Easing Treasury yields made growth-oriented shares, particularly in technology, more attractive.
Thursday brings additional data and corporate results. Retail sales figures and weekly jobless claims are due at 8:30 a.m. ET. U.S. Bancorp $USB is also on the earnings calendar before markets open, with Netflix $NFLX set to report after the close.
The central question for markets remains whether economic momentum is decelerating sufficiently to restrain inflation without pushing the economy toward a sharper contraction. Michael Kantrowitz, chief investment strategist and head of portfolio strategy at Piper Sandler, said on CNBC's "Closing Bell: Overtime" that rates staying flat or falling is a prerequisite for a broader market rally. "In order for the market to broaden, I believe full stop that you need rates to either move sideways or decline," Kantrowitz said.