The major U.S. index futures are currently pointing to a lower open on Friday, with stocks likely to move to the downside amid continued weakness in the tech sector.
Extended weakness among chip stocks may weigh on Wall Street, as reflected by the 1.3 percent slump by the tech-heavy Nasdaq 100 futures.
Yesterday's negative reaction to Broadcom's (AVGO) guidance may continue to generate selling pressure amid concerns about valuations.
"The market is no longer asking whether AI demand is strong, that has largely been established," said Daniela Hathorn, Senior Market Analyst at Capital.com. "Instead, investors are beginning to question how much of that growth is already reflected in valuations."
She added, "In that sense, Broadcom's results may not have been disappointing, but they were perhaps not enough to justify another leg higher immediately after such a powerful rally."
The futures saw continued weakness after the Labor Department released a closely watched report showing much stronger than expected job growth in the month of May.
The Labor Department said non-farm payroll employment shot up by 172,000 jobs in May after surging by an upwardly revised 179,000 jobs in April.
Economists had expected employment to climb by 85,000 jobs compared to the addition of 115,000 jobs originally reported for the previous month.
The data has led to a sharp increase by treasury yields amid concerns the Federal Reserve will leave interest rates higher for longer.
Following the pullback seen during Wednesday's session, stocks moved mostly higher over the course of the trading day on Thursday. The Dow showed a significant move back to the upside, reaching a new record closing high.
The Dow gave back some ground going into the end of the day but still jumped 874.86 points or 1.7 percent to 51,561.93. The S&P 500 also climbed 30.63 points or 0.4 percent to 7,584.31 but the tech-heavy Nasdaq closed down 23.02 points or 0.1 percent at 26,830.98.
The rebound by the Dow partly reflected a sharp increase by shares of UnitedHealth (UNH), with the health insurance giant surging by 5.2 percent.
UnitedHealth rallied in reaction to an upgrade by Bank of America, which raised its rating on the company's stock to Buy from Neutral.
Dow components American Express (AXP), Goldman Sachs (GS) and Merck (MRK) also posted strong gains on the day.
Meanwhile, the Nasdaq climbed well off its worst levels but still ended the day modestly lower amid weakness among technology stocks.
A steep drop by shares of Broadcom (AVGO) weighed on the tech sector, as the chipmaker plunged by 12.6 percent despite reporting fiscal second quarter earnings that exceeded analyst estimates.
Traders were seemingly disappointed that Broadcom CEO Hock Tan failed to raise the company's full-year forecast of $100 billion in AI chip sales.
"Broadcom may have emerged as a key player in the booming AI infrastructure market, with a particular expertise in the custom chips increasingly being used by the likes of Alphabet and Meta," said AJ Bell head of markets Dan Coatsworth.
He added, "However, just like its rival Nvidia, Broadcom is finding that meeting and even slightly beating forecasts is not enough when the market is holding it to such a high standard."
Banking stocks showed a substantial move to the upside on the day, resulting in a 3.7 percent spike by the KBW Bank Index. The index ended the session at its best closing level in almost four months.
Pharmaceutical and healthcare stocks also saw significant strength, the NYSE Arca Pharmaceutical Index surging by 3.5 percent and the Dow Jones U.S. Health Care Index jumping by 3 percent.
Brokerage, biotechnology and commercial real estate stocks also saw considerable strength on the day, while semiconductor and computer hardware stocks showed notable moves to the downside.
Commodity, Currency Markets
Crude oil futures are slipping $0.10 to $92.94 a barrel after plunging $2.98 to $93.04 a barrel on Thursday. Meanwhile, after climbing $38.10 to $4,505 an ounce in the previous session, gold futures are sliding $35 to $4,470 an ounce.
On the currency front, the U.S. dollar is trading at 160.02 yen versus the 160.01 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1604 compared to yesterday's $1.1610.
Asia
Asian stocks fell broadly on Friday, with South Korea and Japan leading losses due to heavy selling in major technology stocks.
An AI-driven rally that boosted stocks earlier this week fizzled out after chip giant Broadcom's AI revenue projection fell short of expectations. Lingering uncertainty over U.S.-Iran peace negotiations also kept regional markets under pressure.
Hezbollah rejected the latest ceasefire agreement between Israel and the Lebanese government, saying the "imaginary ceasefire" would amount to "a surrender, defeat and achieving the enemy's goals."
Elsewhere, Israeli ministers refrained from approving the proposed ceasefire arrangement during a security cabinet meeting.
"Hezbollah opposes it, and therefore I am not bringing it for a decision. If it agrees, I will bring it for your approval," Prime Minister Benjamin Netanyahu told ministers.
The dollar held steady in Asian trading and was on track for a weekly gain ahead of key U.S. jobs data due later in the day that might show a moderation in job growth.
Spot gold was subdued at $4,463 an ounce, while Brent crude futures fell toward $94 a barrel but were on track for a weekly gain amid stalled U.S.-Iran talks to find a diplomatic solution to end the war.
China's Shanghai Composite Index dropped 0.7 percent to 4,027.74 amid a technology sell-off. Hong Kong's Hang Seng Index ended down 1.2 percent at 24,961.95, dragged down by financials.
Japanese markets fell sharply as semiconductor stocks succumbed to heavy selling pressure following weak results from Broadcom. Investors were also wary of the flare-up in the Middle East hostilities.
The Nikkei 225 Index tumbled 1.3 percent to 66,588.12, extending losses for a second consecutive session. The broader Topix Index settled marginally lower at 3,949.09.Advantest shares slumped 5 percent and Tokyo Electron plunged 6.6 percent.
Seoul stocks nosedived and the Korean won hit its lowest level since 2009 as investors locked in profits from a recent tech-led rally.
The Kospi plummeted 5.5 percent to 8,160.59 due to selling by foreign investors and program-trading curbs. Samsung Electronics, SK Square and SK Hynix plunged 6-10 percent.
Australian markets fell notably as U.S.-Iran peace talks remained in limbo. The benchmark S&P/ASX 200 Index fell 0.7 percent to 8,625.10 as miners extended declines on falling base metals prices. The broader All Ordinaries Index slid 0.7 percent to 8,855.90.
CSL shares jumped 5.8 percent after the company disclosed that director Carolyn Hewson AO purchased almost A$100,000 worth of shares on market this week.
Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index rose 0.5 percent to 13,161.97. erasing losses from the previous two sessions.
Europe
European stocks are mostly higher in cautious trading on Friday investors kept a wary eye on the latest developments in the Middle East.
Hezbollah has rejected a new ceasefire agreement with Israel, and the Israel Defense Forces (IDF) eliminated Hezbollah's engineering unit commander Abed Harb, escalating tensions.
While the German DAX Index is nearly unchanged, the French CAC 40 Index and the U.K.'s FTSE 100 Index are both up by 0.3 percent.
Tech stocks slumped, with Infineon Technologies plunging 6.6 percent and ASM International falling over 4 percent after Broadcom disappointed market expectations.
Energy stocks such as BP Plc and Shell were modestly lower as oil prices stabilized after falling in the previous session.
Bodycote plummeted 10 percent after Apollo Global Management decided to scrap plans for a £1.52B ($2.04B) takeover bid for the British thermal processing services company.
Raspberry Pi Holdings shares soared 20 percent. The single-board computer maker said it expects full-year earnings to significantly exceed market expectations.
U.S. Economic News
Employment in the U.S. jumped by much more than expected in the month of May, according to a closely watched report released by the Labor Department on Friday.
The report showed notable growth in leisure and hospitality, local government, and health care jobs, while employment in the financial activities sector declined.
Meanwhile, the Labor Department said the unemployment rate came in at 4.3 percent in May, unchanged from April after in line with economist estimates.
At 3 pm ET, the Federal Reserve is scheduled to release its report on consumer credit in the month of April. Consumer credit is expected to increase by $17.5 billion in April after climbing by $24.8 billion in March.
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May 22, 2026 14:46 ET Minutes of the latest Fed policy session was the highlight of the week along with survey data on the U.S. housing market. In Europe, survey data signaled the trends in the euro area private sector. Further, consumer price inflation data from the U.K. was in focus. In Asia, various economic indicators from China drew attention to the health of the economy.