S&P 500 Futures Plummet: Are AI Spending Fears Triggering a Market Crash? Find Out NOW!

NEW YORK — Friday, December 12, 2025 — The U.S. stock market is opening on a mixed note today: while Dow futures are modestly higher, the S&P 500 and Nasdaq futures are lower. Investors are currently reassessing the costs and profitability associated with the ongoing AI buildout, following recent warnings from tech giants Broadcom and Oracle.

In premarket trading at 5:41 a.m. ET, Dow E-minis rose by 82 points (+0.17%), while S&P 500 E-minis fell by 13.5 points (-0.20%), and Nasdaq 100 E-minis dipped 142.75 points (-0.56%).

This mixed market dynamic reflects growing concerns about the potential “AI bubble” amidst broader optimism stemming from rate cuts and sector rotations. This pattern has emerged as the defining storyline of the week, especially after Thursday’s trading session, which saw the Dow and S&P 500 reaching new record highs, while the Nasdaq lagged behind.

Market Snapshot: Record Highs with Diverging Trends

Wall Street is coming off a record-setting Thursday:

• Dow Jones Industrial Average: 48,704.01 (+1.34%)
• S&P 500: 6,901.00 (+0.21%)
• Nasdaq Composite: 23,593.86 (-0.25%)

This divergent performance is significant, as it indicates a market that is broadening beyond mega-cap tech. However, concerns persist regarding the sustainability of some of the most crowded AI-linked trades.

Today’s trading situation is essentially a test: can the rally continue to expand into sectors like financials, materials, value, and small caps even if AI enthusiasm cools?

Futures Mixed Amidst Warnings from Broadcom and Oracle

The immediate catalyst affecting trading today is Broadcom, a key player in AI infrastructure. The company’s stock dropped roughly 5% in premarket trading after it warned that future margins could be pressured due to a higher mix of AI-related business. Despite forecasting strong revenue, the focus is shifting to the quality of that revenue.

This warning had a ripple effect across the semiconductor sector, with AMD down about 1.2% and Nvidia down approximately 0.8% in premarket trading. Broadcom’s outlook emphasizes a critical tradeoff: while AI demand remains strong, the quality of AI revenue—considering factors like margins and customer concentration—is becoming increasingly important.

Another significant concern is emanating from Oracle. Following a disappointing earnings report, the company’s stock plummeted by as much as 16.5% after revealing an additional $15 billion in capital expenditures for fiscal 2026. This has reignited worries about whether companies are overspending on AI without clear paths to profitability.

Despite the anxiety surrounding AI investments, the S&P 500 still managed to close at an all-time high on Thursday, indicating a rotation rather than a wholesale exit from equities.

Thursday's trading exhibited classic sector rotation, with materials and financials leading, while technology and communications services lagged. The Russell 2000 index, which represents small-cap stocks, also closed at a new record high, further illustrating this trend.

Market analysts have framed Friday's session as “risk-on, but reallocated.” This suggests that while investors remain committed to owning stocks, they are increasingly selective about where to place their bets in light of cooling AI enthusiasm.

Federal Reserve Policies and Economic Data Delays

The macroeconomic backdrop continues to support market movements, albeit with some caution. The Federal Reserve recently implemented a 25-basis-point rate cut, marking its third consecutive cut. However, it also indicated a more cautious approach to future easing, contributing to the ongoing rotation in the market rather than a simple rally.

Currently, traders are pricing in about 50 basis points of cuts by the end of 2026, despite the Fed signaling fewer cuts than anticipated. Additionally, Fed Chair Jerome Powell announced a surprise Treasury bill buying program starting at $40 billion per month, which some interpret as additional liquidity support.

Market participants are closely watching remarks from several Fed officials today, including Philadelphia Fed President Anna Paulson and Cleveland Fed President Beth Hammack, to glean insights into the Fed's future policy direction.

The current market jitteriness is partly due to the absence of key economic data, with a 43-day federal government shutdown causing delays in crucial reports. Investors are anticipating the release of significant data next week, including the November jobs report and the Consumer Price Index (CPI), which could impact market sentiment as holiday liquidity diminishes.

Key Stocks to Watch

Several individual stocks are drawing attention as we head into the trading session:

Broadcom (AVGO): Despite strong AI demand, concerns about potential margin decreases as AI revenue grows have investors carefully reassessing profitability.

Oracle (ORCL): The company is under scrutiny for its capital expenditures and the implications these have for AI spending discipline.

Costco (COST): The retailer reported quarterly revenue of $67.31 billion and profit of $4.50 per share, beating estimates, although shares were only marginally lower due to elevated valuations.

Lululemon (LULU): Shares surged around 10% following news of CEO Calvin McDonald stepping down and an increase in its annual profit forecast.

Cannabis stocks: Shares have jumped after reports that President Donald Trump may advocate for easing federal restrictions on marijuana.

Lastly, the annual reshuffle of the Nasdaq 100 index is set to take place after today’s market close, with potential implications for passive investment flows.

Overall, today's market narrative is one of rotation, not retreat. While AI continues to be a significant growth engine, investors are now more attuned to issues of cost, margins, and financing, setting up a complex landscape as we head into the final weeks of 2025.