US Election Rally Fades After One Day: Arm and Qualcomm Results Drag Nasdaq Futures Down Over 1%

On November 5, US stock index futures traded mixed, as the rally driven by the midterm election results in the previous session failed to carry over.

Weak results and forward guidance from Arm and Qualcomm (NASDAQ: QCOM) reignited market concerns about the profit outlook for the AI sector, putting pressure on technology stocks.

As of press time, Nasdaq 100 index futures fell 1.17% to 28,282.25 points, S&P 500 index futures slipped 0.22% to 7,703.51 points, while Dow Jones index futures rose 0.42% to 53,724 points, indicating that capital continued to rotate into non-technology sectors.

Previously, the US Democratic Party won control of both the Senate and the House of Representatives in the midterm elections, removing a major political uncertainty facing the market.

At the close on November 4, the S&P 500 rose 1.6%, the Nasdaq Composite gained 1.4%, and the Dow Jones Industrial Average surged 3%, marking its largest single-day gain in 19 months.

However, the market also worries that a Democratic-controlled Congress could tighten regulation of the AI and data center industries.

Related expectations have already triggered a selloff in global AI-related stocks, with technology shares in Japan and South Korea falling particularly sharply in Asian markets.

Among chip stocks, Arm fell nearly 3% after hours, after already dropping about 5% during regular trading.

Although the company's third-quarter revenue and profit both beat expectations, its fourth-quarter guidance failed to surprise the market.

Qualcomm (NASDAQ: QCOM) also fell about 3% after hours.

Its third-quarter mobile phone business revenue came in below expectations, and it warned that chip supply chain costs are rising, offsetting the positive impact of overall earnings beating estimates.

Investors will next focus on a new round of corporate earnings and US employment data.

The US will release initial jobless claims and Challenger layoff data on Thursday, and the October nonfarm payrolls report on Friday.

The data will provide further basis for assessing the condition of the US labor market and the Federal Reserve's December interest rate decision.