US stock futures were mixed on Thursday, with technology shares under pressure after Alphabet's results reignited concerns about the escalating costs of artificial intelligence. Nasdaq 100 futures dropped 260 points, or 0.87%, while S&P 500 futures slipped 0.28% and Dow futures were flat.
Alphabet tumbled 10.2% in pre-market trading, contrasting with a 3.6% gain for Microsoft, as investors differentiated between companies pouring capital into AI and those generating cash from it. Alphabet's third-quarter revenue came in at $127.6 billion, missing expectations, despite Google Cloud sales more than doubling. Its negative free cash flow of $9.07 billion sharpened questions about the returns on data-center investment.
Microsoft offered a counterpoint, reporting $18.6 billion in positive free cash flow and 48% Azure growth. The selling pressure spread to software and chipmakers: Fortinet fell 25%, ServiceNow lost 18.2%, AMD declined 2.8%, and Intel slid 3.7% in early trading.
Fed pause meets its first economic test
Policymakers held interest rates at 3.75%–4% on Wednesday, but Lisa Cook and Beth Hammack voted for a quarter-point increase. Futures markets indicated an above-81% probability of tightening in December. At 8:30 am Eastern, investors are due to receive September's Personal Consumption Expenditures inflation figures, advance third-quarter GDP, and weekly jobless claims. Economists expect annualized GDP growth of about 3.2% and monthly core PCE inflation of 0.3%.
Amazon and Intel face the next earnings test
Both companies are scheduled to report after the closing bell, with Amazon's AWS growth and capital spending plans under particular scrutiny following Alphabet's sell-off. Intel's report will offer another assessment of semiconductor demand and its ability to capitalize on AI infrastructure investment.
Lagarde's resignation jolts ECB's policy outlook
European Central Bank President Christine Lagarde announced that she will leave office on 7 February 2027, months before her term expires in October. The surprise came ahead of the ECB's rate decision at 9:15 am Eastern Time, when policymakers are widely expected to leave their deposit rate at 2.5%. With energy-driven inflation still a concern, investors will look for clues about possible December tightening.
Oil retreats, but supply risks remain unresolved
Brent crude slipped 1.1% to $114.05 a barrel by 09:22 GMT, while US West Texas Intermediate fell 1.5% to $101.27. Reports of renewed US-Iran diplomatic contacts encouraged traders to trim geopolitical exposure. Yet continuing Houthi attacks and threats to regional shipping leave energy markets vulnerable to disruption.
This article is for informational purposes only and does not constitute financial advice.
