By Shashwat Chauhan and Utkarsh Hathi
Nov 3 (Reuters) - US stock index futures were mixed on Tuesday as crude oil prices ticked up and markets awaited the midterm election results, while Apple joined the list of Big Tech companies whose results failed to impress investors.
Apple fell 3.9% in premarket trading after the company warned the cost of memory chips would continue to rise, pressuring its holiday-quarter gross margin.
AI-powered analytics software provider Palantir Technologies forecast revenue
above estimates for the last three months of the year after topping third-quarter expectations. Its shares, however, fell 7.7%.
The Nasdaq-100 closed more than 10% below its all-time closing high on Monday, confirming that the tech-heavy index has entered a correction as investors grow wary of Big Tech's soaring AI spending and little evidence of adequate returns.
Several tech companies have also tapped the bond market to finance big AI investments recently, amplifying concerns that debt-funded spending will become harder to justify as borrowing costs rise.
At 7:07 a.m. ET, Dow E-minis were down 489 points, or 0.94%, and S&P 500 E-minis were down 14.75 points, or 0.19%. Nasdaq 100 E-minis were up 36.25 points, or 0.13%.
A rise in chip stocks helped offset some losses. Nvidia climbed 1.4% after falling for the last four sessions. Following the recent heavy losses in Nvidia, Apple surpassed the chip designer to become the world's most valuable company last week.
AMD gained 1.8% ahead of its quarterly earnings due after the bell, while Marvell Technology and Intel rose 1.4% and 2.1%, respectively.
MIDTERM RESULTS AWAITED
American voters will deliver a verdict on the first two years of President Donald Trump's second term in Tuesday's midterm elections, with polls and nonpartisan analysts favoring Democrats to wrest the House from Republicans, while control of the Senate remains uncertain.
"Concerns around government spending and deficits have continued to build, contributing to market volatility," Societe Generale analysts said in a note.
"However, any meaningful fiscal expansion would still require extensive negotiation, and with Democrats likely to gain control of the House, the legislative backdrop could become more gridlocked."
Morgan Stanley analysts said in a note earlier this week that the elections should help remove a major market overhang. They believe the US market correction that began in June is in its "final innings".
Another risk factor could be the US renewing attacks on Iran after the midterms, something that Trump has hinted at in recent weeks. J.P.Morgan analysts said in a note earlier this week that they view any dip in the markets due to geopolitical tensions as a buying opportunity.
However, when asked by reporters on Monday if he was considering striking Iran after the midterms, Trump said "no."
Crude oil prices rose on Tuesday after slumping in the previous session, as an Iranian official said a deal to end the war was far off, while the United States struck Iran's Qeshm Island.
Drugmaker Pfizer was up 0.8% after lifting its annual revenue and profit forecast.
Semiconductor test equipment maker Aehr Test Systems gained 13.1% and broadband solutions provider Harmonic added 16.5% after the companies raised their full-year revenue forecasts.
(Reporting by Shashwat Chauhan and Utkarsh Hathi in Bengaluru; Editing by Shinjini Ganguli and Maju Samuel)
