Chip selloff drags Nasdaq futures ahead of May jobs

A pullback in semiconductor shares pushed Nasdaq futures lower on Friday as traders awaited the U.S. May nonfarm payrolls report. Nvidia, Intel, Micron, AMD and Broadcom fell about 1.5% to 3.8% in premarket trading.

Futures tied to the S&P 500 were down 0.49% and Nasdaq 100 futures fell about 1.02%. Dow futures rose roughly 36 points, or under 0.1%. The broader market showed mixed moves ahead of the jobs data.

Semiconductor names led the decline. Nvidia slipped about 1.5% while peers including Intel, Micron, AMD and Broadcom dropped between 2% and 3.8% as traders reduced positions after a sizable rally earlier in the year.

Analysts say the chip sector had been supported by expectations of higher spending on artificial intelligence in data centers, cloud services and enterprise software. Heavy gains left some positions concentrated, and that contributed to profit-taking in the group.

The U.S. Labor Department will release the May nonfarm payrolls report at 8:30 a.m. ET. Economists surveyed expect payrolls to rise by 85,000, down from a 115,000 gain in April. Market participants are focused on the unemployment rate and wage growth for signals about labour-market strength and implications for Federal Reserve policy.

If current losses hold through the trading session, the S&P 500 would post its first weekly decline since April. The Nasdaq was set to finish the week slightly lower, while the Dow was on track for a third straight weekly gain. Selling pressure has been concentrated in technology and semiconductors, while other sectors limited broader declines.

Corporate earnings influenced premarket moves. Lululemon Athletica fell nearly 12% after trimming its full-year profit forecast and issuing second-quarter guidance below analysts’ estimates. CooperCompanies rose about 4.8% after reporting second-quarter results that beat expectations.

Geopolitical developments remained in the background. Hezbollah rejected a proposed Lebanon ceasefire and Israel indicated troops would remain in place. Those developments carry the potential to push oil prices higher, which can affect inflation readings and central-bank decisions.

With the jobs report due, markets were positioned for sensitivity to any surprise in payrolls, wages or unemployment that could alter expectations for interest-rate policy.