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ASML Holding (Nasdaq: ASML) has dropped about 12.5% in the past week, but BofA Securities is calling the selloff overdone. The firm says a Chinese shift toward domestic DUV tools would likely trim next year’s sales by only about €1.4 billion, or 2.4%, while ASML’s EUV leadership remains the harder moat to challenge.
Morgan Stanley is staying in the AI bull camp, calling the recent pullback more of a positioning reset than a fundamental warning. The firm still sees AI compute demand outstripping supply for years, with capability gains, wider adoption, and long-term infrastructure spending keeping the supply-chain setup attractive after the selloff.
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The semiconductor sell-off kept pressure on tech while stronger blue-chip earnings gave the Dow room to run. Nasdaq-100 futures fell 0.7%, weighed down by another leg lower in chip stocks, while S&P 500 futures edged up 0.1%. Dow futures jumped 464 points, or 0.9%, buoyed by upbeat results from Sherwin-Williams (NYSE: SHW) and Coca-Cola (NYSE: KO).
The split tape shows how narrow the market’s patience has become. The VanEck Semiconductor ETF (Nasdaq: SMH) fell 3%, with Micron Technology (Nasdaq: MU) and Western Digital (Nasdaq: WDC) each sliding about 5%. Seagate Technology (Nasdaq: STX) and Astera Labs (Nasdaq: ALAB) also traded lower, extending the chip unwind and echoing the overnight weakness in Asia.
This is a high-stakes earnings week for the AI trade. Amazon (Nasdaq: AMZN), Meta Platforms (Nasdaq: META), Microsoft (Nasdaq: MSFT) and Apple (Nasdaq: AAPL) are all on deck, and investors want to know whether hyperscaler spending can still support the chip rally. The Fed’s Wednesday decision adds another layer, with traders looking for clues on whether September brings the next policy move.
Here’s a look at where things stand as of pre-morning trading:
Dow Futures: 52,867 Up 0.93%
Nasdaq 100 Futures: 28,014 Down 0.62%
S&P Futures: 7,459 Up 0.16%
The semiconductor rout went global, with Asian markets catching the heat from U.S. AI-capex worries and fresh concerns over China’s chip progress. South Korea’s Kospi sank 10%, triggering two trading halts, while Japan’s Nikkei fell 4%, and U.S. chip names including Micron (Nasdaq: MU), Super Micro, Intel (Nasdaq: INTC) and NVIDIA (Nasdaq: NVDA) remained under pressure premarket.
PayPal (Nasdaq: PYPL) managed to clear the bar in Q2, beating expectations on adjusted EPS, revenue, and payment volume while lifting its full-year profit outlook. On guidance, Q3 adjusted EPS is expected to decline in the low single digits, keeping the stock’s reaction tied to whether investors reward the beat or focus on the near-term profit pause.
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Gerelyn Terzo is the author of dividend investing handbook "Dividend Investing Strategies: How to Have Your Cake & Eat It Too." A veteran financial journalist, she covers agri-finance for outlets like Global AgInvesting and the broader stock market and personal finance for 24/7 Wall Street. She began at CNBC and later helped launch Fox Business in New York. Gerelyn currently resides in Woodland Park, Colorado and dabbles in nature photography as a hobby.
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