Stock futures were dropping on Tuesday as investors ditched chip makers and some of the other AI plays that had helped keep the market afloat the previous session.
Optical network provider Coherent was the S&P 500's worst performer ahead of the open, dropping 6.8%. The stock surged 7.8% on Monday as the PHLX semiconductor index entered a new bull market.
Rival optical equipment company Lumentum declined 6.2%. Corning, Intel, Marvell, Micron, Sandisk, Seagate, and Western Digital were among the other AI stocks struggling in premarket trading on Tuesday.
Home Depot climbed 1.8% after the home-improvement retailer's second-quarter earnings beat analysts' expectations, signaling that demand for smaller renovation projects remains robust.
Baidu fell 5.2% after the Chinese search-engine provider posted a slump in second-quarter profit and revenue as it plows money into an effort to turn itself into an AI company.
Fabrinet tumbled 10%, even after the optical packaging company's fourth-quarter results topped Wall Street's targets. Shares are up 110% over the past year, so investors may be taking the chance to lock in some profit.
Nike added 1%. The athletic apparel retailer's shares hit their lowest closing price in 12 years on Monday, as investors fret about slowing sales in China and intense competition from younger brands.
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