Deutsche Bank Research reports that the S&P 500 and Nasdaq fell last week in a global tech sell-off, with the Magnificent 7 entering correction territory. Chipmakers led the weakness as the Philly Semiconductor Index slumped despite Micron’s revenue beat. US equity futures are firmer today, with S&P 500 and Nasdaq futures up alongside slightly higher 10-year Treasury yields.

Tech weakness and futures rebound

“Recapping last week now, and markets were rocked by a global tech sell-off, even as oil prices declined amid increasing traffic through the Strait of Hormuz. So both the S&P 500 (-1.95%, -0.05% on Friday) and the Nasdaq (-4.60%, -0.24% Friday) declined, whilst the Magnificent 7 (-5.46%, +1.47%) entered correction territory, down -12.6% from its May 28 peak.”

“A large part of the tech weakness was driven by chipmakers, as the Philly Semiconductor Index dropped by -7.94% (-5.29% Friday), despite a brief reprieve midweek after Micron beat revenue estimates for Q4.”

“Asian equity markets are mixed this morning. Easing geopolitical tensions in the Middle East are providing some support, though fresh regional trade frictions are weighing on sentiment after China imposed tighter export controls on 20 Japanese entities, requiring government approval for shipments.”

“The KOSPI (-2.24%) is the weakest performer, with technology stocks still under pressure following last week’s semiconductor volatility, while the Nikkei (-0.88%) is also lower.”

“US equity futures are firmer, with both S&P 500 and Nasdaq futures up +0.57%, while 10yr UST yields are +1.2bps at 4.38%.”

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