Wall Street set for lower open as Alphabet results reignite AI spending fears
SPY•U.S. stock futures fell after Alphabet shares dropped 11.5% in premarket trading on disappointing search advertising results and higher AI spending, putting more than $450 billion in market value at risk if losses hold. Microsoft rose 1.8% after reporting a cash-flow beat and forecasting strong cloud growth.
1. Futures fall on AI concerns
U.S. stocks were set to open lower Thursday, with Nasdaq 100 futures down 1.22%, S&P 500 futures down 0.4% and Dow futures down 0.24%. Alphabet shares fell 11.5% in premarket trading after disappointing search advertising results and a surge in cash burn as AI-related spending accelerated. The decline put more than $450 billion in market value at risk if losses held.
2. Microsoft bucks the trend
Microsoft rose 1.8% after delivering a cash-flow beat and forecasting strong cloud growth, though it pared gains following reports it planned to raise at least $25 billion through its first U.S. investment-grade bond sale in more than nine years. Software stocks also fell after Fortinet dropped 26.1% and ServiceNow slid 18.7% following their quarterly results.
3. Economic data in focus
U.S. inflation data showed the Personal Consumption Expenditures Price Index rose in line with economists’ estimates, while a separate reading showed the economy grew faster than expected in the third quarter. The Federal Reserve held rates steady on Wednesday; traders widely expected a rate hike at its December meeting.
