Wall Street technology stocks were attempting to recover on Monday, with Nasdaq 100 futures rising nearly 260 points in premarket trading. However, the rebound has done little to repair the damage from Friday's sharp sell-off, as concerns over mounting artificial intelligence (AI) investments continue to weigh on investor sentiment.
Nasdaq 100 futures for December 2026 were trading around 28,788, up 254 points, or 0.89%. The gain follows a bruising session on Friday, when the Nasdaq Composite plunged 2.86% to close at 25,437, marking its steepest percentage decline since June 5.
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The recovery in futures has so far made up only around a quarter of the Nasdaq Composite's 747-point decline on Friday, highlighting the cautious mood among investors despite early buying interest in technology stocks.
The broader market also ended sharply lower on Friday. The S&P 500 dropped 1.82% to 7,580.07, while the Dow Jones Industrial Average declined 1.09% to 51,770.31.
Several AI-linked stocks were showing signs of recovery in premarket trading on Monday. SpaceX gained 3.2%, while Advanced Micro Devices (AMD) rose 2.2%. Nvidia was up 1.5% and Micron Technology advanced 2.7%. CoreWeave and Nebius were also trading 2-3% higher.
The gains come after a broad technology sell-off on Friday, triggered by growing concerns about how much companies are spending on AI infrastructure and whether those investments will generate adequate returns.
Intel and Amazon's weaker-than-expected quarterly performances added to the pressure. Intel shares plunged 28.6% on Friday, marking their steepest single-day decline since 1974. Nvidia fell 4.2%, while AMD dropped 10.9%. The semiconductor sector declined 7.2%.
Market participants are increasingly questioning whether the enormous sums being committed to AI will translate into meaningful returns and how long companies may have to wait before seeing those benefits.
"Investors are getting more concerned over whether companies will be able to see any return from their AI investment and how quickly they will see it," Oliver Pursche, senior vice president at Wealthspire Advisors, told Reuters.
The recent market action also reflects a growing divide between companies delivering results above expectations and those falling short. While stronger performers are being rewarded, companies missing market expectations are facing steep corrections.
Beyond developments in the technology sector, investors will be tracking several key events, including the upcoming US midterm elections, the Federal Reserve's policy decision and Friday's US jobs report.
Lower oil prices and growing optimism that diplomatic efforts could help ease tensions in the Israel-Iran conflict may also offer some support to broader market sentiment.
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