U.S. futures weaken as Netflix guidance disappoints and Middle East tensions intensify: Dow Jones, S&P, Nasdaq, Wall Street

U.S. stock index futures traded lower on Friday as investors remained cautious about the outlook for artificial intelligence spending while monitoring renewed military escalation between the United States and Iran.

By 02:57 ET (06:57 GMT), Dow Jones futures had fallen 336 points, or 0.6%, S&P 500 futures were down 66 points, or 0.9%, and Nasdaq 100 futures had dropped 488 points, or 1.7%.

The weaker tone follows Thursday’s decline on Wall Street, where the Dow Jones Industrial Average slipped 0.2%, the S&P 500 lost 0.5%, and the Nasdaq Composite fell 1.47%.

According to analysts at Vital Knowledge, concerns surrounding the artificial intelligence sector continued to dominate market sentiment, outweighing geopolitical developments in the Middle East. Technology shares, particularly memory-chip manufacturers, remained under pressure.

Vital Knowledge analysts said: “[T]he list of things worrying people will sound familiar to anyone following the space: the absence of free cash flow for hyperscalers/neoclouds, costs that seem to scale higher with revenue, the reliance on capital markets […] to fund capex […], the huge pipeline of debt/equity supply that’s washing over markets, the increasingly poor financial/fundamental prospects for bleeding edge frontier labs […], and questions about data center overcapacity.”

Netflix falls after weaker-than-expected outlook

Netflix (NASDAQ:NFLX) shares dropped more than 8% in after-hours trading after the streaming company released third-quarter guidance that came in below analysts’ expectations, raising fresh questions about the pace of future growth.

The company forecast earnings per share of $0.82 for the third quarter, below the consensus estimate of $0.84. Revenue is expected to reach $12.86 billion, compared with market forecasts of $13.0 billion.

Despite the softer outlook, Netflix told shareholders that its financial performance “remains solid,” adding that it is “on track to meet our objectives for the year.”

The company also announced that, beginning in January 2027, it will publish viewing-hours data once a year rather than twice annually, as it continues shifting investor attention towards financial performance measures such as revenue and operating profit. Netflix stopped reporting quarterly subscriber numbers in 2025.

Investors await another round of earnings

Markets will receive another batch of corporate earnings before Friday’s opening bell.

The Travelers Companies (NYSE:TRV), Truist Financial Corporation (NYSE:TFC), Fifth Third Bancorp (NASDAQ:FITB) and Regions Financial Corporation (NYSE:RF) are all scheduled to release quarterly results.

Investors continue to monitor how large companies are navigating uncertainty surrounding artificial intelligence investment, higher energy prices and supply risks linked to the conflict between the United States and Iran.

Nevertheless, Vital Knowledge noted that “macro commentary from management teams pretty much across the board” has remained broadly optimistic.

Recent U.S. economic indicators have also been supportive. Core retail sales have remained firm, initial jobless claims have declined, manufacturing activity has strengthened in the northeastern United States, while both consumer and producer inflation surprised to the downside.

U.S. and Iran continue military exchanges

Military tensions escalated further on Friday after Iran launched another round of attacks against U.S. facilities in the Middle East, following American strikes on Iranian military targets.

U.S. Central Command confirmed that it had completed a sixth consecutive night of operations against Iran, stating that the strikes were intended to weaken Iranian military capabilities while “holding Iran accountable” for attacks on commercial shipping.

Iranian media reported that the latest U.S. attacks also damaged civilian infrastructure, including five bridges and a railway station.

The renewed conflict has once again raised concerns over shipping through the Strait of Hormuz, where tanker traffic has faced further disruption despite hopes that last month’s ceasefire would stabilise the route.

Oil prices moved higher as a result, with Brent crude rising 0.7% to $84.81 a barrel and U.S. West Texas Intermediate crude gaining 1.0% to $79.76.

SpaceX delays Starship launch after engine issue

SpaceX (NASDAQ:SPCX) halted a planned Starship flight test in Texas shortly before liftoff on Thursday after several of the rocket’s 33 engines failed to ignite properly.

Although the engines initially started, the launch sequence was aborted moments later. Reuters reported the interruption, while Chief Executive Elon Musk said on social media that another launch attempt could take place as early as next week, without specifying how many engines failed.

SpaceX shares fell more than 4% in extended trading following the announcement. The stock had already closed Thursday’s session at $131.11, marking its first finish below the company’s $135 initial public offering price.

Netflix stock price

Travelers Companies stock price

Truist Financial Corporation stock price

Fifth Third Bancorp stock price

Regions Financial stock price

SpaceX stock price