Nasdaq Futures Drop 1.6% Amid AI Stock Selloff and Middle East Tensions
By John Nada·Jul 18, 2026·3 min read
Nasdaq futures dropped 1.61% amid a selloff in AI stocks and Middle East tensions. Netflix also fell, while Abbott saw gains.
Nasdaq 100 E-Mini futures slid 1.61% this morning as the global selloff in chip stocks intensified, according to Yahoo Finance. The decline mirrors broader market concerns over valuations in AI-related sectors. Taiwan's Taiex and Japan's Nikkei are in technical correction territory, primarily driven by AI stock woes. This comes after a strong rally earlier in the year left valuations stretched.
Adding to the pressure, a breakthrough from Chinese AI startup Moonshot, which unveiled its Kimi K3 model, is shaking investor confidence. The Kimi K3 could rival top offerings from companies like OpenAI, triggering parallels to last year's "DeepSeek moment." Investors are now reassessing their positions in U.S. chip and AI infrastructure stocks, which fell in pre-market trading.
The global ripple effect of this selloff is apparent in the significant declines observed in various major indices. The Taiex and Nikkei's move into correction territory underscores the broad impact of AI-related stock volatility. The earlier rally in these sectors was driven by optimism around AI advancements. However, the rapid rise in valuations has now raised concerns about their sustainability, prompting the current pullback.
Meanwhile, Netflix shares took a hit, dropping over 9% after reporting weaker-than-expected Q2 revenue. The streaming giant also projected another quarter of slowing growth, further dragging on investor sentiment. Netflix's performance reflects broader concerns about consumer spending and the competitive landscape in streaming, which have been clouding the outlook for tech stocks.
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Compounding market jitters are escalating tensions in the Middle East. U.S. and Iranian forces exchanged attacks, increasing volatility. The price of WTI crude jumped more than 2% as a result of these geopolitical strains. The ongoing conflict, particularly in the strategic Strait of Hormuz, has significant implications for global oil supply, adding another layer of uncertainty to already jittery markets.
Elsewhere, the broader market saw significant movements. Sandisk tumbled over 12%, leading S&P 500 losers, while Marvell Technology dropped more than 8%. Mining stocks also struggled, with Coeur Mining and Hecla Mining down over 7% and 6% respectively. These declines are reflective of broader market concerns and the specific impacts of declining metal prices, which have pressured mining stocks.
In contrast, Abbott Laboratories saw a significant uptick, gaining over 10% after posting strong Q2 results and raising its full-year earnings guidance. This placed it as the top gainer on the S&P 500, providing a glimmer of positive news amid widespread market downturns. Abbott's performance highlights the varied reactions among different sectors, with healthcare showing resilience even as tech and commodity stocks falter.
In addition to these developments, investors are now awaiting a slew of U.S. economic data. This data will be crucial in providing further direction for the markets, as economic indicators continue to influence investor sentiment. The mixed performance across different sectors points to the complexity of current market dynamics, with investors weighing a combination of geopolitical, economic, and sector-specific factors.