By Tharuniyaa Lakshmi and Ragini Mathur
Oct 23 (Reuters) - Wall Street's main indexes were set to open lower on Friday as caution prevailed after a sharp selloff in AI-linked stocks, while telecom stocks tumbled on fears that intensified competition from SpaceX could erode their market share.
AT&T, Verizon and T-Mobile were down about 5% each in premarket trading after a report said SpaceX was in talks with cellular infrastructure companies about launching a nationwide wireless carrier program.
US cell
tower operators, however, gained from this news, with Crown Castle up 10.5% and American Tower up 7.3%.
SpaceX shares gained 2.1%.
AI-related shares swung sharply this month, first coming under pressure over CoreWeave's debt burden and the cost of financing AI investment, then rallying on Wednesday after upbeat results from SpaceX and Super Micro.
The gains reversed on Thursday and the tech-heavy Nasdaq fell nearly 3%. The slide accelerated following Meta's nearly 8% decline after the Facebook parent reported its first cash outflow in more than a decade amid concerns over its AI-related expenditures.
On Friday, CoreWeave shares were down 1.1%, and 'Magnificent 7' stocks were little changed, with Meta falling 0.9%.
"This is the short term where the selloff is extreme, and I don't think there are fundamental reasons for it," said Kim Forrest, chief investment officer at Bokeh Capital Partners.
"We're at the beginning of a long cycle of AI and people thought it was going to be much shorter."
Market focus remains on the earnings season, with major companies such as Microsoft, Alphabet and Amazon reporting next week.
At 08:37 a.m. ET, Dow E-minis were down 447 points, or 0.84%, and S&P 500 E-minis were down 34.5 points, or 0.45%. Nasdaq 100 E-minis were down 81.25 points, or 0.28%.
Brent crude held near a more than five-month high amid Middle East supply concerns, adding to inflation worries ahead of the Federal Reserve's policy meeting next week. [O/R]
Markets expect the Fed to keep interest rates unchanged at its meeting next week, according to the CME's FedWatch Tool. The bets for a hike this month declined after a couple of Fed officials signalled little urgency for such a move.
Investors will also parse a final University of Michigan consumer sentiment reading later in the day.
Nasdaq was on track for a weekly loss, while the benchmark S&P 500 and the blue-chip Dow remained higher, supported by gains in defensive sectors as investors sought refuge from volatility in technology stocks.
S&P 500's third-quarter profit growth is now forecast at 32.3%, up from 30.7% previously, according to LSEG data.
In other premarket moves, American Express raised its profit forecast for 2026 after reporting strong Q3 results. Still, the card giant's shares fell 2%.
SLB rose 2.1% after the oilfield services provider beat Wall Street estimates for third-quarter profit.
Gold miner Newmont fell 1.7% after reporting quarterly results and warning that unit costs are expected to trend higher in 2027.
Bloom Energy dipped 4% even after the energy firm raised its fiscal 2026 forecast.
(Reporting by Tharuniyaa Lakshmi and Ragini Mathur in Bengaluru; Editing by Shinjini Ganguli)
