US Pre-Market, 18 August 2026: Fabrinet Guidance Splits AI Hardware From Its Customers

Sentiment: mixed S&P 500 futures: -0.46% · Nasdaq futures: -1.27% · Dow futures: -0.11%

Nasdaq 100 futures traded 1.27% lower at 29,713 at 8:40am ET on 18 August 2026 while Dow futures held at -0.11%, a 116 basis point gap that traces to selling concentrated in the AI equipment supply chain. Fabrinet FN.US fell 11.21% to 531.48 in pre-market after guiding to a margin squeeze in fiscal Q1 2027, and the optical, memory and semiconductor equipment names selling into the same buildout followed it down 3.9% to 6.6%. Their customers did not follow: MSFT.US traded 0.38% higher and AAPL.US 0.56% higher at the same timestamp.

Overnight drivers

The semiconductor fund SOXX.US fell 3.65% in pre-market on 18 August 2026 against a 0.73% gain in the consumer staples fund XLP.US.

• FN.US -11.21% to 531.48, the largest decliner in a 250 name sweep. Fabrinet beat on fiscal Q4 earnings and revenue and guided above consensus, then flagged that its usual first-quarter expense seasonality will compress margins in fiscal Q1 2027, per StreetAccount.
• COHR.US -6.58%, LITE.US -6.29%, GLW.US -6.24% and CIEN.US -4.09% tracked it down. Fabrinet builds optical transceivers on contract for parts of that group, so a margin comment from it reprices the rest.
• WDC.US -6.52%, SNDK.US -5.90%, STX.US -5.81%, SKHY.US -5.47% and MU.US -4.71% reversed Monday in full: SNDK.US closed 8.88% higher and MU.US 4.13% higher one session ago.
• LRCX.US -5.32%, TER.US -5.22%, AMAT.US -4.84%, KLAC.US -4.75% and ASML.US -3.88% carried the equipment makers lower, with data centre power names BE.US -3.82% and VRT.US -3.57% marked down on the same spending question.
• VIX at 15.67, up 3.16% from Monday's 15.19 close. The 10-year Treasury yield sits at 4.736%, up 0.25%, and the dollar index is unchanged at 99.647.

Hyperscalers held while their suppliers fell

MSFT.US +0.38% and AAPL.US +0.56% traded higher at 8:36am ET while the companies selling them AI equipment fell between 4% and 11%.

• GOOGL.US -0.55%, AMZN.US -0.31% and META.US -1.20% round out the five largest buyers of that equipment, each inside 1.2%.
• NVDA.US -1.96% and AVGO.US -1.71% fell a fraction of what the suppliers beneath them lost, against LRCX.US -5.32% and COHR.US -6.58%.
• Economists at the European Central Bank published a blog on 17 August 2026 arguing a correction in AI-linked equity valuations is likely under either of two cases, one where investors are overoptimistic and one where prices correctly reflect the technology. European equities opened lower behind it, STOXX 600 -0.36% and DAX -0.27%.

Overnight Asia and Europe

Japan's Nikkei 225 closed at 67,460.73 on 18 August 2026, down 2.54%, giving back Monday's 0.74% gain and more.

• Nikkei 225: 67,460.73 (-2.54%)
• KOSPI: 6,869.83 (-1.55%)
• Hang Seng: 25,471.15 (+0.07%)
• STOXX 600: 654.04 (-0.36%)
• DAX: 26,266.53 (-0.27%)
• FTSE 100: 10,746.56 (+0.24%)

WTI crude futures sit at US$84.26, up 0.62%, and gold futures at US$4,452.60, down 0.47%.

July housing starts fell 12.4% as permits rose 5.0%

Privately owned housing starts ran at a seasonally adjusted annual rate of 1,239,000 in July 2026, 12.4% below the revised June rate of 1,415,000, the Census Bureau and HUD reported at 8:30am ET on 18 August 2026.

• Starts landed under the 1,390,000 consensus. That 12.4% decline carries a 90% confidence interval of ±9.5%, which excludes zero and makes the drop statistically significant.
• Building permits ran the other direction at 1,443,000, up 5.0% from a revised 1,374,000 in June and 3.1% above July 2025. Single-family authorisations reached 894,000.
• Single-family starts fell to 808,000, down 9.9% against a ±10.4% interval that includes zero, so that leg is not statistically significant.
• XHB.US +0.35%, DHI.US +0.44%, LEN.US +0.44% and TOL.US +0.38% each moved less than half a percent on the split print.

Home Depot beat and reaffirmed

HD.US rose 2.25% to 345.49 in pre-market after reporting fiscal second-quarter adjusted earnings of $4.92 per share against the $4.73 expected by analysts polled by LSEG.

• Revenue reached $47.86 billion against $47.27 billion expected, a 5.7% increase on the year.
• Comparable sales rose 1.7% where StreetAccount expected 0.9%. CFO Richard McPhail put it as the highest comparable sales figure since fiscal Q3 2022.
• Home Depot reaffirmed rather than raised full-year guidance at 2.5% to 4.5% sales growth and 12.4% to 12.6% operating margin. McPhail described "frozen housing market" conditions to CNBC.
• LOW.US +1.64% traded up beside it, and the rest of the pre-market gainers were defensive: XOM.US +1.72%, JNJ.US +1.23%, WMT.US +1.22%, TGT.US +1.19%.

Where Monday closed

The S&P 500 finished Monday 17 August 2026 at 7,745.06, down 0.52%, after a hyperscaler capital spending note left MSFT.US as the single largest drag at -3.04%.

• S&P 500: 7,745.06 (-0.52%)
• Nasdaq Composite: 26,644.91 (-0.32%)
• Dow Jones Industrial Average: 53,459.78 (-0.51%)
• Russell 2000: 3,057.54 (-0.35%)
• VIX: 15.19 (+6.60%)

DUOL.US +4.26% after D.A. Davidson raised it to buy from neutral, BABA.US +2.98%, and TSLA.US -1.72% after The Information reported an August launch for its Cybercab.

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