U.S. stock futures retreated early Friday, snapping a streak of record-setting sessions driven by artificial intelligence enthusiasm. The Dow Jones Industrial Average had closed above 50,000 for the first time since earlier in the year, while the S&P 500 and Nasdaq Composite also notched new all-time highs. However, a sharp rise in bond yields and a surge in crude oil prices injected caution into the market.
By 5:38 a.m. ET, Dow E-minis were down 0.66%, S&P 500 E-minis fell 1.07%, and Nasdaq 100 E-minis slid 1.56%. The pullback comes as the 10-year Treasury yield climbed to 4.54%, its highest level since early June 2025, according to data from CME Group. Meanwhile, Brent crude oil jumped nearly 3% to $109 a barrel, with the Strait of Hormuz remaining closed, Reuters reported.
“An extended conflict in the Middle East could push energy prices higher, stoke inflation expectations, and increase borrowing costs—a red flag for tech investors focused on earnings,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank. Futures pricing now reflects a greater probability that the Federal Reserve may raise interest rates by another quarter point in December, according to CME Group’s FedWatch tool.
Thursday’s session was marked by broad gains, with the S&P 500 rising 56.99 points, or 0.8%, to 7,501.24. The Dow added 370.26 points, or 0.7%, to close at 50,063.46, while the Nasdaq gained 232.88 points, or 0.9%, to 26,635.22, according to the Associated Press. The rally was led by AI-related stocks, with Cisco Systems posting the strongest single-stock move.
Cisco shares surged 13.4% to a record high after the networking giant raised its full-year revenue outlook and announced plans to cut nearly 4,000 jobs as part of a restructuring. The company reported fiscal third-quarter revenue of $15.8 billion, up 12% year-over-year, with non-GAAP earnings of $1.06 per share. AI infrastructure orders from hyperscalers reached $5.3 billion so far this year, and Cisco increased its fiscal 2026 AI order forecast to $9 billion, up from a prior $5 billion. Chief Executive Chuck Robbins described the company’s positioning as “connecting and securing AI.”
Nvidia also extended its gains, adding 4.4% after Reuters reported that the U.S. had approved sales of its H200 chips to about 10 Chinese companies, including Alibaba, Tencent, ByteDance, and JD.com, though shipments have not yet begun. Lenovo and Foxconn were granted distributor status. The H200 is Nvidia’s second most powerful AI chip. Meanwhile, Cerebras Systems made its Nasdaq debut, opening at $350, an 89% premium over its IPO price of $185, after raising $5.55 billion. The opening trade valued the chipmaker at $106.75 billion on a fully diluted basis. CEO Andrew Feldman predicted AI usage would “explode” as the technology advances.
However, the broader semiconductor sector showed mixed action. Shares of Qualcomm, Intel, and Micron fell between 3.4% and 6.1% on Thursday, while Nvidia helped push the overall space higher. The rally remains narrow, with only about 20% of S&P 500 members outperforming since March 30, according to LSEG data. “Not necessarily a healthy market,” said Patrick Ryan, chief investment strategist at Madison Investments.
Investors now look ahead to next week’s earnings from Nvidia and major retailers including Walmart, Home Depot, Target, and TJX. Yung-Yu Ma, chief investment strategist at PNC Financial Services Group, said the key question is consumer resilience: “How resilient is the consumer?” The results will provide a critical test of whether the rally can broaden beyond a handful of tech leaders.
