US stock futures fell sharply on Thursday, reversing the previous session's tech-led rebound as investors reassessed the sustainability of artificial intelligence spending and oil prices climbed on geopolitical tensions. Nasdaq 100 futures dropped more than 500 points, or 1.93%, while S&P 500 contracts lost 1.1% and Dow futures shed 0.69%.
The pullback follows Wednesday's 1.1% Nasdaq gain, when strong results from AI infrastructure companies briefly restored confidence. However, disappointing reactions to earnings from Tesla, IBM, and Lam Research, combined with Brent crude surging above $112 a barrel and a sell-off in Chinese equities, have undermined that recovery.
1. Tesla and Meta Expose the Cost of AI Investment
Tesla shares fell 5.3% in premarket trading after the company cut its 2026 capital spending forecast from $25 billion to $20 billion. While free cash flow reached $1.5 billion, the reduced guidance raised questions about the pace of its AI projects. Morningstar analyst Seth Goldstein interpreted the result as evidence of a more capital-efficient approach.
Meta Platforms reported a 26% revenue increase to $64.6 billion, but the company raised the lower end of its annual spending forecast to $135 billion and approved the issuance of non-voting shares to fund expansion. A separate $25 billion privacy judgment in New Mexico added legal uncertainty to the outlook.
2. IBM and Lam Research Show Why Earnings Beats Are Insufficient
IBM fell 5.7% premarket despite strong results and improved cash-flow guidance. Lam Research dropped 8.5% even after its $8.22 billion revenue and $2.20 adjusted earnings per share beat expectations. The market's muted response highlights that investors are now demanding more than just solid numbers, particularly in the AI sector.
Other tech names, including Nvidia, Intel, SpaceX, and Super Micro Computer, also retreated as Wednesday's rally reversed.
3. Brent Breaks Above $112 as Saudi Attacks Revive Supply Fears
Brent crude jumped more than 3% to around $112 a barrel after deadly attacks in Saudi Arabia revived fears of disrupted Gulf shipments. At least three people died in incidents involving an airport and oil facilities, while Washington ordered some diplomatic personnel to leave the region.
MUFG analysts noted that repeated attacks on energy infrastructure are keeping geopolitical risks elevated, even without a confirmed major production shutdown.
4. Chinese Shares Approach a Technical Bear Market
China's CSI 300 index fell as much as 1.6%, bringing its retreat from a June high close to the conventional 20% bear-market threshold. Hong Kong's Hang Seng lost 2.9%, and the Hang Seng Tech index plunged 4.6%. Alibaba fell almost 6% and Tencent declined 3.4%.
Disappointing company results and fading hopes of substantial stimulus have hurt confidence, despite China's 4.5% third-quarter growth.
5. Jobless Claims Test the Economy Beyond Technology
Initial US jobless claims are due at 8:30 am ET, with economists expecting 200,000 applications, up from 199,000 previously. The Conference Board's leading index follows at 10 am, with the Kansas City Fed manufacturing survey later in the morning.
Earnings from Procter & Gamble, Honeywell, Union Pacific, Blackstone, and American Airlines will offer a broader view of household spending, industrial demand, and financing conditions.
This article is for informational purposes only and does not constitute financial advice.
