US equity futures are trading lower on Thursday, with Nasdaq 100 contracts down 0.6% in early trading.
The decline comes despite TSMC reporting exceptionally strong second-quarter results and raising its full-year outlook, a development that would typically support tech shares.
Instead, the market is exhibiting a classic "sell the news" reaction, suggesting that the relentless rally in artificial intelligence stocks is running out of steam.
The sell-off highlights a shift in sentiment among traders who have been heavily positioned in AI-related equities.
With TSMC, the world's largest chipmaker, delivering on high expectations, there is little left to surprise investors on the positive side.
This has prompted profit-taking and a reassessment of valuations in the semiconductor sector.