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The major U.S. index futures are currently pointing to a sharply lower open on Monday, with stocks likely to extend the pullback seen during last Friday’s session.

A sell-off by technology stocks is likely to weigh on Wall Street, as AI darling and sector leader Nvidia (NASDAQ:NVDA) is plummeting by 11.5 percent in pre-market trading.

The plunge by Nvidia comes after Chinese startup DeepSeek’s AI Assistant overtook rival ChatGPT to become the top-rated free application available on Apple’s App Store in the United States.

DeepSeek’s ascendance has doubt on Silicon Valley’s hefty AI capex spending and the sustainability of the U.S. technical edge in artificial intelligence.

After turning in a relatively lackluster performance early in the session, stocks moved mostly lower over the course of the trading day on Friday. The major averages all moved to the downside, with the S&P 500 giving back ground after reaching a new record intraday high.

The major averages climbed off their worst levels going into the close but remained in negative territory. The Dow fell 148.82 points or 0.3 percent to 44,424.25, the Nasdaq slid 99.38 points or 0.5 percent to 19,954.30 and the S&P 500 dipped 17.37 points or 0.3 percent to 6,101.24.

Despite the pullback on the day, the major averages still posted strong gains for the holiday-shortened week. While the Dow surged by 2.2 percent, the Nasdaq and the S&P 500 both jumped by 1.7 percent.

The weakness that emerged on Wall Street may have reflected concerns about the outlook for interest rates ahead of the Federal Reserve’s monetary policy meeting next week.

While the Fed is almost universally expected to leave interest rates unchanged, traders are likely to pay close attention to the accompanying statement for clues about the outlook for rates.

Recent economic data has led to concerns about the Fed leaving rates on hold for a prolonged period, but many economists still expect the central bank to resume cutting rates sometime in the first half of the year.

CME Group’s FedWatch Tool is currently indicating a 71.1 percent chance rates will be lower by at least a quarter point following the Fed’s June meeting.

On U.S. economic front, revised data released by the University of Michigan showed consumer sentiment unexpectedly deteriorated by more than previously estimated in the month of January.

The University of Michigan said its consumer sentiment index for January was downwardly revised to 71.1 from the preliminary reading of 73.2. Economists had expected the index to be unrevised.

The consumer sentiment index is down from the final December reading of 74.0, marking the first decrease in six months.

Meanwhile, a report released by the National Association of Realtors showed existing home sales jumped by much more than expected in the month of December, reaching their highest level since last February.

Semiconductor stocks showed a significant move to the downside on the day, dragging the Philadelphia Semiconductor Index down by 1.9 percent.

Texas Instruments (NASDAQ:TXN) led the semiconductor sector lower, plunging by 7.5 percent after reporting better than expected fourth quarter results but providing disappointing earnings guidance for the current quarter.

Oil and networking stocks also saw notable weakness, while pharmaceutical stocks showed a strong move to the upside, driving the NYSE Arca Pharmaceutical Index up by 1.4 percent.

U.S.-listed shares of Danish drug maker Novo Nordisk (NYSE:NVO) surged by 8.5 percent after the company announced positive trial results for its obesity drug.

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