Premarket declines in Alphabet and Tesla shares weigh on sentiment amid rising oil prices and AI spending concerns.
U.S. stock futures fell ahead of Thursday’s open, driven by disappointing reactions to earnings from Alphabet and Tesla. Investors focused on rising capital expenditures, particularly in artificial intelligence, despite strong quarterly results from Alphabet. Tesla’s weaker-than-expected earnings and increased AI spending deepened concerns over valuations.
Alphabet shares dropped over 5% in premarket trading, while Tesla slid more than 7%. The declines underscored broader skepticism about whether escalating tech investments will yield sufficient returns. Oil prices added pressure, with U.S. benchmark futures surging 4% to above $90 a barrel after Houthi attacks on Saudi tankers in the Red Sea.
Geopolitical tensions and higher energy costs further dampened market sentiment, offsetting optimism from Alphabet’s revenue beat. Futures for the Dow Jones, S&P 500, and NASDAQ all pointed lower, signaling a cautious start to trading.