U.S. equity futures edged lower Friday, extending the prior session’s sharp selloff as investors reassessed the likelihood of a December Federal Reserve rate cut and continued to rotate out of high-valuation technology names.

At 10:30 GMT, Dow Jones futures fell about 0.1% (-60 pts), S&P 500 futures slipped 0.2% (-12 pts), and Nasdaq 100 futures dropped 0.4% (-100 pts).

Wall Street’s major averages suffered their worst daily decline in more than a month on Thursday. The Dow Jones Industrial Average shed nearly 800 points (-1.7%), slipping back below 48,000 only a day after first crossing the mark, while the S&P 500 fell 1.7% and the Nasdaq Composite slid 2.3%, threatening to snap a seven-week winning streak.

Fed repricing cools risk appetite

A string of hawkish comments from Fed officials has dented expectations for a December cut. Minneapolis Fed President Neel Kashkari said he opposed last month’s move and is undecided on December, while St. Louis Fed’s Alberto Musalem and Cleveland Fed’s Beth Hammack warned against easing policy too quickly with inflation still elevated. Market-implied odds now hover near 50% for a 25 bp reduction next month, down sharply from roughly 68% a week earlier.

The policy uncertainty is compounded by the aftermath of the nearly 43-day government shutdown. With official releases only now restarting, investors have relied on state-level indicators suggesting weekly jobless claims eased modestly in early November—too small a drop, in traders’ eyes, to strengthen the case for immediate easing.

Tech under pressure; AMAT highlights China drag

The rotation away from mega-cap growth remains the chief drag on sentiment. Applied Materials fell pre-market after guiding that 2026 revenue faces a $600 million headwind from tighter U.S. export controls to China and warning that China wafer-fab equipment spending will likely decline next year. The company tempered the outlook by pointing to a second-half 2026 uplift tied to AI-driven capex.

Eyes turn next week to NVIDIA’s results, which Barclays flagged as a pivotal read-through for whether AI enthusiasm—and the heavy infrastructure spending underpinning it—can re-accelerate.

Energy pops on supply risk

Crude prices jumped after reports that a Ukrainian drone strike damaged an oil depot in Russia’s Black Sea port of Novorossiysk, raising supply-disruption risks. Brent rose ~2.4% to $64.49 and WTI gained ~2.7% to $60.25. Even so, both benchmarks are only on track for minor weekly gains after an OPEC outlook this week projected a small surplus in 2026, which had triggered a midweek selloff.

The setup into the close

• Macro: The market’s near-term path hinges on the pace of U.S. data normalization post-shutdown and whether incoming prints meaningfully shift the December Fed calculus.
• Positioning: With valuations still elevated in segments of tech, rallies may meet supply unless guidance from AI bellwethers surprises to the upside.
• Cross-asset: Higher real yields and a firm dollar would keep pressure on duration-sensitive equities; oil’s spike adds an inflation-risk wrinkle if sustained.

Into Friday’s session, the burden of proof sits with bulls. Without clearer evidence of a December cut or stronger earnings validation for AI leaders, the path of least resistance remains sideways-to-lower, with sector rotation—rather than broad risk-on—shaping index moves.