Tech Weakness Pulls U.S. Futures Lower as Global Markets Approach New Highs

US equity futures struggled to gain traction once again as a pullback in major technology names weighed on sentiment, even as global benchmarks edged close to new all-time highs.

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The Nasdaq 100 was set to open roughly 0.5% lower, pressured by renewed weakness in chip and AI-related stocks. Broadcom Inc. slid more than 5% in premarket trading after its revenue outlook failed to meet the market’s elevated expectations. S&P 500 futures also slipped about 0.2%, a modest retreat after the benchmark posted a record close the day before. In contrast, futures tied to US blue-chip and small-cap indexes continued to signal fresh highs, underscoring a noticeable shift beneath the surface of the market.

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This divergence highlights a key theme taking shape across US equities: the rally is no longer concentrated in mega-cap tech. Instead, the upswing is widening out, propelling the S&P 500 toward what could become its third straight year of gains. For many investors, this week’s confirmation that the Federal Reserve remains firmly in its easing cycle has helped clear the path for a potential year-end surge.

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Strength wasn’t limited to the US. Europe’s Stoxx 600 climbed as much as 0.5% to a new record, while a broad index tracking Asia moved to within 2% of its historical peak, signaling continued global appetite for risk assets.

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According to Richard Hunter, head of markets at Interactive Investor, traders are increasingly seeking exposure to real assets as rate cuts from the Federal Reserve and expectations for additional easing spur a rotation. “Investors are looking for alternative real assets, especially given the rate cut and the possibility of more to come,” he wrote. He noted that this rotation also reduces concentration risks, particularly those tied to the “Magnificent Seven,” which had grown increasingly dominant.

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This broadening theme is also pushing diversification back into the spotlight. After a year in which technology giants were responsible for a large share of equity gains, concerns about lofty valuations and heavy capital expenditure plans have encouraged market participants to search for opportunities across different geographies and sectors.

“Given today’s market backdrop, diversification is the price worth paying to stay fully invested in equities,” said Mark Wilson of Goldman Sachs. He pointed to compelling stories playing out in South Korea, Japan, China, and across emerging markets more broadly.

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Goldman Sachs strategists also remain optimistic about the longer-term market outlook. The firm expects US stocks to set new records next year, supported by steady economic growth and wider adoption of artificial intelligence that could further boost corporate earnings.

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The team led by Ben Snider reaffirmed its projected S&P 500 target of roughly 7,600 by 2026. That implies an upside of around 10% from current levels. They’re not alone in their bullish stance strategists at Morgan Stanley, Deutsche Bank, and RBC Capital Markets also anticipate gains of more than 10% for US equities.

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The upbeat tone extends into Europe as well. In a survey of 17 strategists, not a single participant predicted a major pullback. Forecasters at UBS and Deutsche Bank were among those expecting nearly 13% upside from Wednesday’s close, reinforcing the idea that the global rally still has room to expand.

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Some market watchers are even eyeing shorter-term momentum. With investors rotating into stocks that have lagged much of the year, the outlook for the remainder of 2025 has brightened. “Everyone is convincing themselves that there will be a Christmas rally, so it looks like there will be one, and honestly, there’s no negative catalyst in sight before year-end,” said Karen Georges, a fund manager at Ecofi Investissements in Paris. She added that investors are increasingly interested in picking up this year’s underperformers, calling it a favorable moment to rebalance portfolios.

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In currency markets, dollar index hovered near a two-month low on Friday and was heading toward its third consecutive weekly loss. Treasury yields inched higher, with the 10-year note rising two basis points to 4.17%. Meanwhile, commodities gained momentum, with gold extending its winning streak to a fourth day and silver pushing further into record territory.

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