Broadcom Inc. reported weaker-than-expected earnings for its fiscal first quarter on June 4, 2026, sending its stock down 8.3% in after-hours trading and triggering a broad sell-off in Nasdaq futures, which fell 1.2% overnight. Oil prices also slipped below $80 a barrel amid concerns over slowing demand in China.
Broadcom’s Earnings Miss Fuels Tech Sell-Off, Drags Nasdaq Lower
Broadcom Inc.’s fiscal first-quarter results fell short of Wall Street expectations, dealing a blow to the semiconductor sector and sparking a broader market pullback. The company, a dominant player in data-center chips and networking hardware, reported adjusted earnings per share (EPS) of $13.40, below the consensus estimate of $14.15, according to Refinitiv data. Revenue of $14.8 billion also missed forecasts of $15.2 billion, though it remained up 12% year-over-year.
The earnings report sent Broadcom’s stock tumbling 8.3% to $1,125.50 in after-hours trading, erasing nearly $50 billion in market value. The weakness rippled through the tech sector, with Nasdaq futures dropping 1.2% overnight, extending losses from Wednesday’s session. The S&P 500 and Dow Jones Industrial Average also traded lower, though the declines were more modest at 0.5% and 0.3%, respectively.
Analysts Point to AI Slowdown and China’s Economic Headwinds
Analysts cited several factors behind the underperformance, including softer demand for data-center chips—Broadcom’s core business—amid signs of cooling enterprise spending. The company’s AI-related revenue, a bright spot in recent quarters, grew just 5% year-over-year, well below the 20%+ growth rates seen in late 2025. Broadcom’s CFO, Hock Tan, acknowledged in a conference call that macro headwinds, particularly in China, are weighing on customer budgets
, though he reiterated guidance for fiscal 2026, projecting revenue growth of 8% to 10%.
Tan also highlighted operational challenges, noting that supply chain disruptions in Southeast Asia have delayed some shipments, though we expect these to normalize in the second half
. Investors, however, appeared skeptical, with some downgrading Broadcom’s stock to hold
or underperform
in the wake of the report. JPMorgan Chase analysts, for instance, lowered their price target from $1,300 to $1,150, citing execution risks in the AI infrastructure segment
.
Crude Oil Drops Below $80 as China’s Import Decline Deepens
Separately, crude oil prices dipped below $80 a barrel for the first time since late May, as traders priced in slower-than-expected demand growth in China. Benchmark Brent crude settled at $79.85, down 1.8%, while U.S. West Texas Intermediate (WTI) fell to $77.50, a 2.1% decline. The pullback followed data from China’s General Administration of Customs showing May crude imports dropped 12% month-over-month, the largest decline since December 2025.
For more on this story, see Stock market today: Dow ends 620 points lower, Nasdaq drops and S&P 500 snaps 9-day win streak.
Market participants pointed to weaker-than-anticipated economic data from China, including a 0.8% contraction in May services PMI, as a key driver. The slowdown in China’s recovery is the wild card for oil markets this quarter
, said Edward Bell, commodities strategist at Standard Chartered. If domestic demand doesn’t rebound soon, we could see further downside pressure on prices.
OPEC+ officials, however, signaled no immediate plans to adjust production quotas. In a statement ahead of their next meeting on June 18, the cartel reiterated its commitment to gradual and orderly adjustments
based on market conditions. The group’s compliance with output cuts has been near 120% in recent months, according to secondary sources cited by Bloomberg, leaving little room for further reductions.
Nasdaq Futures Extend Losses as AI Stocks Face Growth Concerns
Nasdaq futures opened Thursday morning down 1.2%, extending Wednesday’s 0.8% decline and marking the index’s fifth straight day of losses. The sell-off reflected broader investor rotation away from high-growth tech stocks, with the Magnificent Seven—Apple, Microsoft, Nvidia, Amazon, Meta, Alphabet, and Tesla—underperforming the broader market.
Nvidia, which has led the AI-driven rally over the past year, saw its stock drop 2.5% in after-hours trading following a report that its data-center revenue growth slowed to 18% year-over-year in the March quarter, down from 32% in the prior quarter. Analysts at Goldman Sachs noted that while Nvidia’s fundamentals remain strong, the deceleration in growth is a reminder that the AI boom may be entering a maturity phase
.
Meanwhile, Tesla’s stock fell 3.5% after the company announced a delay in its Cybertruck production ramp-up, citing supply chain constraints
. The move underscored concerns about automotive margins, with Tesla’s gross margin slipping to 19.5% in the first quarter, down from 22.3% a year earlier.
Treasury yields, which had risen sharply in May on expectations of a June Federal Reserve rate cut, stabilized overnight, with the 10-year note yield holding steady at 4.35%. Traders now appear to be pricing in a more cautious approach from the Fed, with CME Group’s FedWatch tool showing a 65% probability of a 25-basis-point cut at the June 19-20 meeting, down from 80% a week ago.
What’s Next: Fed Policy and China’s Recovery in Focus
With the market’s attention now squarely on the Fed and China, traders will be watching for further signals on monetary policy and economic growth. The Fed’s preferred inflation gauge, the personal consumption expenditures (PCE) price index, is due Friday, June 6, with economists expecting a slight uptick in core PCE to 2.8% year-over-year from 2.7% in April.
In China, officials are set to unveil new stimulus measures at the Politburo meeting next week, with expectations high for targeted support to manufacturing and real estate sectors. Patience is wearing thin with policymakers
, said Larry Hu, chief China economist at Macquarie Group. If the recovery stalls further, we could see more aggressive measures, including infrastructure spending or tax cuts.
For Broadcom, the focus will shift to its second-quarter guidance when it reports earnings in August. The company’s ability to navigate supply chain challenges and sustain AI-related growth will be critical, particularly as competitors like Qualcomm and AMD ramp up their own data-center chip offerings. In the near term, however, the stock’s underperformance suggests investors are bracing for a period of volatility in the semiconductor sector.
Oil markets, meanwhile, will hinge on whether China’s demand recovery gains traction. If May’s import data proves to be a one-off, prices could stabilize. But if June imports weaken further, the risk of a broader downside move in crude will rise, potentially testing the $75 support level.
The coming week will be pivotal in determining whether the recent market pullback is a correction or the start of a deeper downturn. For now, the data—and the Fed’s next move—will dictate the direction.
