US Stock Futures Mixed as Alphabet Falls, Microsoft Gains and Fed Comments Draw Attention to AI Spending: Dow Jones, S&P, Nasdaq, Wall Street
US stock index futures were mixed on Thursday as investors assessed quarterly earnings from major technology companies and comments from Federal Reserve Chair Kevin Warsh concerning the potential impact of higher interest rates on artificial intelligence investment.
Nasdaq futures declined 1.3%, while S&P 500 futures fell 0.5%. Dow Jones futures advanced 0.3%, reflecting differing movements across the major US equity benchmarks.
Alphabet shares dropped more than 10% in premarket trading following its quarterly results, while Microsoft advanced after reporting revenue and earnings above expectations. Samsung Electronics also declined following its semiconductor division’s earnings announcement.
Nasdaq Futures Fall 1.3% as Technology Shares Decline
At 04:03 ET (08:03 GMT), Nasdaq futures were down 400 points, equivalent to 1.3%.
S&P 500 futures declined 36 points, or 0.5%, while Dow Jones futures gained 150 points, representing an increase of 0.3%.
The movements followed gains across the main Wall Street indices in the previous session, when technology shares benefited from renewed investor interest in artificial intelligence-related companies.
Recent financing agreements, corporate earnings announcements and Oracle’s commitment to limit fundraising through fiscal 2030 had contributed to the preceding session’s market performance.
However, sentiment toward technology stocks changed following the latest quarterly earnings announcements.
Analysts at Deutsche Bank described a more cautious approach to technology shares as “the main theme in markets” during Thursday morning’s trading.
Alphabet Shares Decline More Than 10% Following Quarterly Results
Alphabet (NASDAQ:GOOG) shares fell more than 10% in US premarket trading after the Google parent reported third-quarter results below market expectations.
Deutsche Bank analysts described the company’s earnings as “underwhelming results.”
The earnings shortfall was primarily associated with revenue from Google’s services business.
Advertising revenue growth also slowed to its lowest rate in five quarters.
During the company’s earnings call, management reported increased adoption of Google’s “AI Mode” search feature, although revenue generated from these searches was growing more slowly than revenue from traditional search activity.
The difference in monetisation rates attracted attention as Alphabet continued investing in artificial intelligence infrastructure.
Alphabet Capital Expenditure Reaches $51.4 Billion
Alphabet reported capital expenditure of $51.4 billion, an increase of $6.5 billion compared with the preceding quarter.
The higher spending contributed to a further deterioration in free cash flow, which moved deeper into negative territory.
The company has continued allocating substantial financial resources to expanding its artificial intelligence capabilities and supporting infrastructure.
Investors were assessing the relationship between the company’s investment expenditure and the revenue generated by its AI-related services.
The quarterly figures provided additional information about the financial implications of Alphabet’s technology investment programme.
Microsoft Reports 19% Revenue Growth to $92.28 Billion
Microsoft (NASDAQ:MSFT) shares advanced in premarket trading after the company reported quarterly revenue and adjusted earnings above analyst expectations.
Revenue increased 19% to $92.28 billion in the company’s first fiscal quarter.
Adjusted earnings reached $4.89 per share, exceeding Wall Street forecasts.
The results included a 48% increase in revenue from Microsoft’s Azure cloud computing business.
The expansion of Azure contributed to the company’s overall revenue performance as demand for cloud computing and artificial intelligence services continued.
Despite Microsoft’s results, Deutsche Bank analysts said they were “insufficient to brighten the overall gloomy tech mood this morning.”
Microsoft Announces Employee Buyout Programme
Microsoft also recently announced plans to offer voluntary buyouts to a portion of its workforce.
According to a report by The Wall Street Journal, approximately 60,000 employees could be eligible for the programme.
Microsoft reported a workforce of 223,000 employees at the end of June.
The announcement came during a period of continued investment in cloud computing and artificial intelligence infrastructure.
The company did not provide additional financial details about the buyout programme in the supplied report.
Samsung Semiconductor Profit Falls Short of Expectations
Samsung Electronics (USOTC:SSNHZ) shares declined more than 4% during trading in South Korea after the company’s semiconductor division reported operating profit below analyst expectations.
The decline followed gains in Samsung’s share price earlier in the year.
Samsung also provided no additional information about a potential shareholder return programme.
The company nevertheless reported its fourth consecutive quarter of record group-wide income.
Overall operating profit reached 100 trillion won, equivalent to approximately $74.52 billion.
The results highlighted differences between the performance of Samsung’s semiconductor operations and its consolidated financial figures.
Samsung Reports Memory Chip Supply Fully Booked for Next Year
Samsung executives told investors that the company’s memory chip supply for the following year was already fully booked.
The company attributed demand to the increasing use of memory chips in artificial intelligence computing systems.
Samsung supplies memory products to technology companies including Nvidia and other businesses involved in AI infrastructure.
Management also indicated that limited availability of memory chips could persist over the next several years.
According to the company, continued supply constraints could contribute to higher memory chip prices.
These comments accompanied the semiconductor division’s earnings announcement and the broader discussion of demand for AI-related hardware.
Federal Reserve Chair Discusses Interest Rate Impact on AI Investment
Federal Reserve Chair Kevin Warsh addressed the relationship between monetary policy and investment in artificial intelligence following Wednesday’s interest rate decision.
The Federal Reserve left its benchmark interest rates unchanged, in line with market expectations.
Warsh discussed the argument that investment returns from artificial intelligence could limit the sensitivity of the sector to higher borrowing costs.
He referred to the view that tighter monetary policy was “not going to have any effect on AI because the returns that investors are expecting are so different,” but said he had been “skeptical of that view.”
Warsh added:
“Interest rates get in the cracks. Interest rates affect, directly or indirectly, almost everything,”
His comments came as companies involved in artificial intelligence increasingly used debt and equity markets to finance infrastructure investment.
Markets Assess December Interest Rate Expectations
Investors were also evaluating the Federal Reserve’s potential monetary policy decisions for the remainder of 2026.
Market expectations pointed toward another interest rate increase in December.
The Federal Reserve had previously raised borrowing costs in September, marking its first rate increase since 2023.
The prospect of additional monetary tightening remained relevant to companies financing capital expenditure through borrowing and equity issuance.
Warsh’s comments placed attention on the possible effects of interest rates across technology investment and corporate financing.
Amazon and Intel Earnings Due After US Market Close
Investors were awaiting additional quarterly earnings announcements from Amazon and Intel, both scheduled for release after Thursday’s US market close.
The reports follow the publication of financial results from Alphabet, Microsoft and Samsung Electronics.
Market participants were monitoring technology companies’ revenue growth, profitability, capital expenditure and demand for artificial intelligence infrastructure.
The European Central Bank was also scheduled to announce its latest interest rate decision later on Thursday.
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