Nasdaq Futures Slide 2.2% as Amazon and Intel Earnings Fuel AI Spending Concerns, Binance Hit by $6.3 Billion Hack: Dow Jones, S&P, Wall Street
US stock futures declined sharply on Friday as disappointing earnings from major technology companies intensified concerns over artificial intelligence infrastructure spending, while a reported $6.3 billion cyberattack on cryptocurrency exchange Binance added to market uncertainty.
Nasdaq 100 futures fell 646 points, or 2.2%, by 04:04 ET (08:04 GMT), indicating further pressure on technology stocks following the previous session’s losses.
S&P 500 futures declined 78 points, or 1.0%, while Dow Jones futures slipped 21 points, or 0.1%.
Investors were also assessing weaker-than-expected forecasts from Intel, slowing growth in parts of Amazon’s business and the Bank of Japan’s decision to maintain interest rates.
Nasdaq Futures Fall as AI Investment Concerns Intensify
The decline in US futures followed a difficult session for technology shares on Thursday, when the Nasdaq Composite lost 1.38%.
Alphabet (NASDAQ:GOOG) was among the largest contributors to the decline, suffering its biggest one-day loss in market value after investors reacted negatively to its plans for substantial additional investment in artificial intelligence.
The Google parent lost more than $500 billion in market capitalisation as concerns grew over the financial returns from its expanding AI infrastructure programme.
Alphabet’s search advertising business also recorded its slowest growth in five quarters, adding to uncertainty over the company’s underlying performance.
Microsoft (NASDAQ:MSFT) shares also finished lower as investors assessed its continued commitment to substantial AI investment.
Like Alphabet and Meta Platforms (NASDAQ:META), Microsoft has maintained its AI spending strategy despite concerns over the pace at which those investments are generating financial returns.
Microsoft also completed a $25 billion bond offering, highlighting the growing role of debt financing in the technology industry’s infrastructure expansion.
The increasing reliance on external financing has raised questions about whether major technology companies can sustain their investment programmes without placing additional pressure on cash flow and balance sheets.
The technology selloff also supported demand for US Treasury securities as investors sought relatively defensive assets.
Binance Reports $6.3 Billion Cryptocurrency Theft
Cryptocurrency markets came under additional pressure following reports of a major cyberattack affecting Binance, the world’s largest cryptocurrency exchange.
Binance said hackers had stolen digital assets worth approximately $6.3 billion in what was described as the largest cyberattack in cryptocurrency industry history.
According to the exchange, roughly half of the stolen assets had been frozen by stablecoin issuers, including Tether and Circle.
Analysts suggested that a sophisticated hacking group known as TraderTraitor may have been responsible, although the identity of those involved had not been confirmed.
Binance suspended withdrawals while working with law enforcement authorities and reviewing its security systems.
The company indicated that withdrawals were expected to resume by Sunday and said that losses would be covered.
Binance stated that “user funds are safe.”
The incident raised concerns about security risks within the cryptocurrency industry, particularly as digital asset companies seek greater participation from mainstream financial institutions.
Bitcoin declined 2.6% to approximately $78,001.80, having briefly fallen below $77,000 for the first time in more than a month.
Amazon Shares Drop More Than 6% as Retail and Advertising Growth Slows
Amazon (NASDAQ:AMZN) shares fell more than 6% in premarket trading following the publication of its third-quarter results.
The company reported slower growth in its online retail and advertising businesses, raising concerns about the performance of two important revenue streams.
Online store sales increased 2%, representing one of the weakest growth rates since the reopening of physical retail stores following the COVID-19 pandemic.
Advertising revenue rose 11%, its slowest growth rate since Amazon began reporting the business separately in 2022.
Part of the slowdown reflected the company’s decision to move its annual Prime Day shopping event into the second quarter, compared with the third quarter in the previous year.
Amazon Web Services delivered stronger performance, generating approximately $46 billion in quarterly revenue, with growth accelerating to its fastest pace in several years.
However, investors remained concerned about the company’s capital expenditure plans.
Amazon reiterated its intention to spend approximately $220 billion on capital investments during the year, while free cash flow had moved into negative territory over the preceding 12 months.
The scale of spending reinforced broader market concerns about the financial requirements of developing AI infrastructure.
Intel Shares Plunge More Than 25% Following Weak Outlook
Intel (NASDAQ:INTC) shares fell more than 25% in premarket trading after the semiconductor company issued fourth-quarter guidance below analyst expectations.
The company forecast revenue of between $15 billion and $16 billion, compared with an average analyst estimate of approximately $17 billion, according to Bloomberg data.
Intel also projected adjusted earnings per share of $0.25, below market expectations.
The weaker outlook reflected subdued demand for personal computer processors and supply constraints affecting important data centre components.
A global shortage of memory chips has created difficulties across the PC market, with demand from artificial intelligence data centres contributing to tighter component availability.
The resulting supply constraints have affected computer manufacturers and weighed on shipments and demand.
Intel’s forecast added to negative sentiment towards semiconductor companies already facing concerns over the sustainability of AI-related investment.
Bank of Japan Holds Interest Rates at 1.25%
Outside the US technology sector, investors assessed the Bank of Japan’s latest monetary policy decision.
The central bank maintained its overnight interest rate at 1.25%, in line with market expectations.
Eight of the nine members of the policy board supported keeping rates unchanged, while board member Takata Hajime favoured a 25-basis-point increase.
The decision came as Japanese policymakers continued to evaluate inflation developments and the outlook for monetary policy.
Economists at Capital Economics interpreted the central bank’s statement as indicating greater confidence that Japan had overcome its longstanding struggle with persistently low inflation.
This assessment suggested that further interest rate increases could remain possible.
Bank of Japan Accelerates ETF Sales Programme
Alongside its interest rate decision, the Bank of Japan announced plans to accelerate the disposal of exchange-traded funds accumulated through previous monetary stimulus programmes.
The central bank said it would sell approximately ¥860 billion of ETF holdings annually, measured at book value.
According to Reuters, the revised pace would reduce the estimated time required to unwind the bank’s ETF portfolio to approximately 43 years, compared with the previous estimate of 112 years.
The decision represents another step towards reducing the central bank’s involvement in Japanese financial markets following years of unconventional monetary policy.
Investors will continue to monitor the implications of the accelerated sales programme alongside the outlook for Japanese interest rates.
For global markets, the immediate focus remains on technology earnings, the financing requirements of AI infrastructure and developments in cryptocurrency markets.
The sharp decline in Nasdaq futures suggests that concerns over investment spending and corporate profitability could continue to influence US equity trading.
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