TLDR
Stock futures fell Thursday as investors bet the Federal Reserve will raise interest rates again in October, pushing bond yields to their highest level in more than 19 years. Intel dropped 3.8% and Marvell declined 3.5% in premarket trading as AI-related stocks struggled under rising borrowing costs.
Meta Platforms slid 2.6% despite unveiling new smart glasses and a hand-held Muse AI device, likely due to profit-taking after a 12% rally since Friday. MGM Resorts tumbled 8.7% after Barry Diller’s People Inc. withdrew its bid to take the casino operator private.
Stitch Fix shares plunged 18% after issuing weak FY2027 revenue guidance, while Everpure gained 5% on a strong preliminary outlook. Stock futures slipped Thursday morning as investors weighed the growing likelihood of another Federal Reserve interest rate hike in October. Bond yields climbed to their highest levels in more than 19 years on the news. Artificial intelligence stocks led the losses. Investors grew cautious about the run-up in borrowing costs and how it might affect companies tied to the AI trade. Intel dropped 3.8% in premarket trading. Marvell fell 3.5% during the same period.
Intel Corp., INTC
Growth stocks often struggle when yields rise. Higher borrowing costs reduce the present value of a company’s future cash flows, which weighs on their share prices.
AI and Chip Stocks Under Pressure
Several other companies linked to the AI trade also declined ahead of the opening bell. Coherent, Corning, Lumentum, Super Micro Computer, and Sandisk all fell as investors grew more cautious. Meta Platforms slid 2.6% even after showing off new products. The company unveiled several new smart glasses and a hand-held device that lets users talk to its Muse AI agent. The drop likely reflects profit-taking. Meta shares had climbed about 12% since Friday’s close, giving investors a reason to cash in some gains.
MGM Resorts Drops After Buyout Bid Falls Through
MGM Resorts tumbled 8.7% after media mogul Barry Diller’s company, People Inc., withdrew its offer to take the hotel and casino operator private. Diller said the deal fell apart because the right conditions never came together. “We didn’t feel the mix was coming together in the way we had hoped,” he said. People Inc. had proposed in June to buy the MGM shares it didn’t already own for $48.30 per share in cash.
The company owns about 66.8 million MGM shares, or roughly 27% of the business. Diller said People Inc. still believes in MGM’s future. He added the company remains open to a possible deal down the road.
Shares of People Inc. rose 4% on the news. Elsewhere in the market, other stocks made sharp moves. Data-storage company Everpure climbed 5% after raising its preliminary outlook for fiscal year 2028.
Everpure expects revenue between $7 billion and $7.3 billion for that year. That would mark growth of 39% to 45%, topping analyst estimates of $6.37 billion. Stitch Fix shares fell 18% after the company posted mixed fourth-quarter results. The company also issued weak guidance for fiscal 2027, citing a tougher environment for consumer spending.
Part of the shortfall came from a temporary technical issue. An unintended change to the site’s checkout process in August briefly limited some customers from requesting new shipments. The company said the problem has since been fixed.
TransUnion shares dropped 3% after announcing that Chief Financial Officer Todd Cello will step down. Cello has spent 29 years with the company, including nine as CFO.
Cello will remain in his role through the end of 2026. He will then serve as an advisor through March 2027 to help with the transition.
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