Nearly $800 billion vanished from the value of the top seven tech companies in just one trading session. After this massive drop on Thursday, US stock futures showed only a mild recovery by Friday morning, reflecting ongoing investor caution.

Stocks Attempt a Cautious Comeback

Futures for the Dow climbed about 0.5%, while those for the S&P 500 inched up 0.2%. The Nasdaq barely moved, gaining just 0.1%. This tepid bounce comes after a brutal day for tech stocks, driven by disappointing earnings reports from Alphabet and Tesla. Both companies revealed increased spending on artificial intelligence, which unsettled investors and led to a sharp tech sell-off. Asian markets mirrored this negative sentiment, with Japan's Nikkei and South Korea's KOSPI also slipping.

New Tariffs and Market Pressure

Adding to the uncertainty, new tariffs imposed under the Trump administration's Section 301 rules kicked in overnight. These tariffs, ranging from 10% to 12.5%, now cover almost all US imports from major trading partners, aiming to withstand legal challenges better than previous iterations. Energy products saw some exemptions, but the overall impact increased costs and market tension.

Oil prices fell about 2%, with Brent crude dropping just below $99 a barrel, easing some inflation concerns. Yet, Brent still aims for a weekly gain despite briefly hitting $100 on Thursday.

Unease Over AI Spending and Bond Yields

The Nasdaq’s weak pre-market performance suggests that fears around rapid AI investment continue to weigh heavily. Chipmakers like Micron and Sandisk traded lower before the open. As Deutsche Bank analyst Jim Reid noted, the combination of rising oil prices and AI-related doubts made for "a challenging 24 hours for markets." Meanwhile, the 10-year Treasury yield remained steady at 4.70% after hitting an 18-month high the day before. Elevated yields typically pressure growth stocks by discounting future earnings more steeply.

The dollar held steady, but Bitcoin reflected the cautious mood, dipping 0.4% to $65,360. Investors focused on upcoming earnings from American Express, NextEra Energy, and Verizon, along with key economic data including S&P Global’s flash purchasing managers index and new home sales figures. Despite the slight gains, all major indexes face weekly losses, signaling continued volatility ahead.