Key Takeaways

• Nasdaq futures plunge 1.1%: Broadcom’s earnings disappointment sent Nasdaq 100 futures down 339 points, while Dow futures rose 0.3% and S&P 500 futures fell 0.5%.
• Broadcom’s 48% revenue jump not enough: Shares slid sharply as the company’s unchanged 2027 outlook failed to deliver the “beat and raise” investors expected.
• $100B AI revenue target held: Broadcom kept its 2027 AI semiconductor revenue projection above $100 billion; Q3 AI chip revenue guided at $16 billion — triple a year ago.
• Vital Knowledge’s verdict: “A big part of the negative reaction is simply expectations and price level — the bar was extremely high.”
• Chip contagion: Intel, Micron, AMD, and Nvidia all fell in premarket trading on Broadcom’s disappointing guidance.
• Prior session losses: Wall Street fell Wednesday on fresh U.S.-Iran strikes and rate hike fears.
• Economy resilient: ADP and ISM data signaled underlying U.S. strength, though the Fed’s Beige Book flagged rising margin pressure and consumer headwinds.
• Trump’s red line: The WSJ reports Trump told aides he won’t resume attacks on Iran unless U.S. forces are killed — a major de-escalation signal.
• Israel-Lebanon ceasefire renewed: A fourth round of U.S.-mediated talks produced a truce contingent on Hezbollah halting fire and evacuating south of the Litani River.
• Iran foreign minister: talks not cut off: Contact with Washington has not been severed despite earlier reports.
• Deal “this weekend”?: Trump suggested progress on Iran could come as soon as this weekend.
• House votes against war: The Republican-controlled House voted to block Trump from continuing the conflict — still needs Senate approval and veto-override margins.
• Brent falls 1.5%: Oil dropped to $96.30 per barrel, while WTI fell 1.2% to $94.84.
• Treasury yields ease: Rate-sensitive 2-year and 10-year yields both retreated on Thursday.

Nasdaq futures sank on Thursday following earnings from chipmaking giant Broadcom that disappointed sky-high estimates, while S&P 500 and Dow futures hovered around both sides of the flatline as investors gauged ongoing tensions in the Middle East.

By 05:05 ET (09:05 GMT), the Dow futures contract had risen by 134 points, or 0.3%, S&P 500 futures had dropped by 36 points, or 0.5%, and Nasdaq 100 futures were down by 339 points, or 1.1%.

The main averages on Wall Street fell in the prior session, weighed down by a fresh exchange of strikes between the United States and Iran that dented hopes for an imminent resolution to their more than three-month-old conflict. Investors have been fretting that the Federal Reserve, eager to keep a lid on energy-induced inflation, may be less inclined to cut interest rates this year should the war continue to drag on.

But semiconductor stocks advanced, underscoring AI enthusiasm that has proven mostly resilient to wider geopolitical strife. New data tracking monthly private payrolls and services sector activity signaled that the underlying American economy was withstanding the impact of the Iran war, although a Fed report pointed to increasing margin pressure facing businesses and rising consumer headwinds, analysts at Vital Knowledge said in a note.

Broadcom Declines as Earnings Underwhelm Lofty Expectations

Revenue at Broadcom spiked by 48% during the second quarter thanks to soaring artificial intelligence chip demand, but shares slid sharply in premarket U.S. trading on guidance that failed to meet the expectations of some investors. The stock has rallied by 38% so far this year.

Broadcom — whose services aid hyperscalers such as Meta and OpenAI in developing custom AI accelerator chips — kept its 2027 financial outlook unchanged, projecting AI semiconductor revenue of over $100 billion. This left investors without the “beat and raise” cadence of returns anticipated from a company at the forefront of the AI boom. In the current quarter, CEO Hock Tan said AI chip revenue would stand at $16 billion — over triple that of a year ago.

Losses in Broadcom spilled over into other major chipmakers. Intel Corporation, Micron Technology, and AMD fell in premarket trading, along with AI-darling Nvidia.

Middle East Developments

Traders were digesting a flood of developments around the Middle East, including updates on diplomatic efforts to end the Iran war.

Israel and Lebanon have agreed to renew their shaky ceasefire — bolstering hopes for an eventual peace deal between the United States and Iran. An agreement between Washington and Tehran has been contingent upon a cessation of fighting in Lebanon, where U.S.-aligned Israeli forces have been battling Iran-backed Hezbollah militants.

Following a fourth round of U.S.-mediated discussions, both Israel and Lebanon said the truce would be “contingent on a complete cessation of Hezbollah fire and the evacuation of all Hezbollah operatives” from areas south of the Litani River in southern Lebanon.

On Wednesday, U.S. President Donald Trump suggested that progress could be made in talks with Iran as soon as this weekend, while Iran’s foreign minister said contact with Washington had not been cut off. Earlier this week, media reports had suggested that Tehran had halted sending messages to the United States through mediators.

Trump told aides that he will not resume attacks on Iran unless U.S. forces are killed, the Wall Street Journal reported — a significant softening of his stance.

The White House is also facing escalating demands at home to end the war. The House of Representatives — despite being controlled by Trump’s Republican party — voted in favor of a resolution blocking the president from continuing the conflict. The measure still needs Senate approval, as well as the backing of two-thirds majorities in both chambers to override a presidential veto.

Brent crude futures, the global oil benchmark, were last down 1.5% at $96.30 a barrel. U.S. West Texas Intermediate crude futures dropped 1.2% to $94.84 a barrel.

Oil prices remain well above pre-war levels, reflecting continued supply constraints stemming from the Strait of Hormuz — a narrow waterway off Iran’s southern coast that has been effectively shuttered to commercial vessel traffic since the start of the joint U.S.-Israeli assault on Iran in late February.

Concerns have abounded that the energy shock will spark an inflation wave that causes central banks, including the Federal Reserve, to lift interest rates in response. The rate-sensitive U.S. 2-year Treasury yield eased on Thursday, as did its benchmark 10-year counterpart.