Chip selloff weighs on US futures as oil rises after US-Iran strikes

U.S. equity futures were set for a weaker Monday open as semiconductor shares came under pressure, CNBC commentator Jim Cramer reported. WTI crude rose more than 3% to nearly $74 a barrel after the United States and Iran exchanged strikes over the weekend, having traded as high as $75 earlier in the session, according to Cramer.

The pressure in chips followed a sharp decline in South Korea. Cramer said SK Hynix fell 15.4% and Samsung Electronics dropped 10.7% in Seoul, with the weakness carrying into U.S. premarket trading.

SK Hynix’s U.S.-listed American depositary receipts were down more than 10% before the open, Cramer said, on the first Korean trading day since the company listed ADRs on Nasdaq. ADRs are certificates listed in the United States that represent shares of a foreign company, allowing U.S. investors to trade exposure to that company in dollars during U.S. market hours. Micron was down about 5% premarket, while Sandisk fell 6%, according to Cramer.

AI demand remains visible in chip supply chain

The broader semiconductor selloff came despite strong reported sales from Taiwan Semiconductor Manufacturing Co. Cramer cited TSMC’s June revenue, which rose 68% from a year earlier. TSMC is the world’s largest contract chipmaker, producing semiconductors designed by other companies rather than selling most chips under its own consumer brand.

Cramer said TSMC remains constrained by capacity and linked that constraint to continued demand for artificial intelligence computing. He also said the industry’s need for a dependable leading-edge manufacturing alternative was one reason his CNBC Investing Club owns Intel.

Technology’s weight in the market also remained a focus. Cramer said in a Sunday note for CNBC Investing Club members that technology stocks continued to dominate market attention, while adding that the club remains diversified.

Brokerage calls move single stocks

Citi raised its Apple price target to $365 from $315 and maintained a buy rating, according to Cramer. Citi analysts said Apple’s recent MacBook and iPad price increases should help counter pressure on margins from higher memory costs, with limited demand impact. The analysts also said Apple could gain share in a difficult market. Cramer noted that Apple closed at record highs late last week.

Meta’s planned Louisiana data center has expanded to a 5 gigawatt project costing more than $50 billion, Cramer reported. Earlier plans called for a 2 gigawatt facility with a $27 billion cost. Cramer said the larger site would have enough power capacity for about 4 million homes, and said Meta had been rewarded by the market last week after considering a cloud business.

HSBC upgraded Capital One to buy from hold, Cramer said. The bank’s shares had declined 17% year to date, which HSBC analysts linked to macroeconomic concerns and questions about the integration of Discover. The analysts said “caution is now more than reflected in the share price,” according to Cramer.

Wells Fargo upgraded Humana to buy from hold and lifted its price target to $502 from $227, Cramer reported. Humana shares have more than doubled from March lows. Wells Fargo analysts cited moderating Medicare Advantage costs and said earnings risk had declined, with room for margin improvement next year.

Citi increased its Rockwell Automation target to $555 from $500 and kept a buy rating, according to Cramer. The call was part of Citi’s industrial earnings preview and cited demand tied to AI and data center construction.

Jefferies upgraded Deckers Outdoor, the owner of Hoka and Ugg, to buy from hold. Cramer said Jefferies raised its target to $130 from $110, implying nearly 23% upside, and said analysts pointed to the company’s record of exceeding guidance.

This story draws on original reporting from CNBC.