TLDR
- AI and chip stocks sold off in premarket trading Tuesday after Monday’s gains
- Coherent dropped 6.8% after surging 7.8% the previous session
- Home Depot rose 1.8% after beating second-quarter earnings expectations
- Flexsteel jumped 10% on strong earnings and better-than-expected guidance
- Fabrinet fell around 9-10% despite posting strong quarterly results
U.S. stock futures edged lower on Tuesday morning as investors pulled back from chip makers and AI-linked stocks that had rallied the day before.
Optical network provider Coherent was the worst performer in the S&P 500 ahead of the open, falling 6.8%. The stock had climbed 7.8% on Monday when the PHLX semiconductor index entered bull market territory.
Rival optical equipment company Lumentum dropped 6.2% in premarket trading. Corning, Intel, Marvell, Micron, Sandisk, Seagate, and Western Digital also fell.
Home Depot Lifts Mood With Earnings Beat
Home Depot climbed 1.8% after the home-improvement retailer reported second-quarter results that beat analyst expectations. The results suggest demand for smaller renovation projects is holding up.
Nike added 1% in premarket trading. The athletic apparel company’s shares had closed at their lowest level in 12 years on Monday, with investors concerned about slowing sales in China and rising competition from newer brands.
Baidu fell 5.2% after the Chinese search engine company reported a drop in second-quarter profit and revenue. The company is spending heavily to transition into an AI business.
Fabrinet tumbled around 9-10% even after its fourth-quarter results beat Wall Street targets. Revenue jumped 45.1% year over year to $1.32 billion. The stock is up about 110% over the past year, and some investors appear to be taking profits.
Flexsteel and Duos Post Strong Numbers
Flexsteel Industries jumped 10% after beating fourth-quarter earnings and revenue estimates. The company guided for first-quarter revenue of $111 million to $115 million, above the $107.9 million consensus. It also generated $24.3 million in operating cash flow during the quarter and completed $62.6 million in share repurchases.
Duos Technologies Group rose 8% after reporting nearly 30% year-over-year revenue growth in the second quarter. The company reaffirmed its 2026 targets of 25 megawatts deployed and more than $50 million in revenue. It also announced a new $111 million contract with a hyperscaler and reported positive adjusted EBITDA of $0.5 million.
Stock futures were also pressured by rising crude oil prices tied to stalled diplomatic talks and concerns over the Strait of Hormuz blockade.
The session reflects a broader pattern of investors rotating out of recent winners and into stocks showing fresh earnings momentum.
Home Depot’s results stand as one of the cleaner positive data points of the session, with the company’s performance suggesting consumer spending on home projects has not dried up entirely.
Fabrinet’s guidance for the next quarter came in above consensus, with revenue projected between $1.375 billion and $1.425 billion, but the stock still fell sharply.
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