US Stock Futures Drop as Traders Focus on AI Spending, Oil Jumps

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Traders braced for more key earnings from Intel Corp., due later in the afternoon.Author of the article: You can save this article by registering for free here. Or sign-in if you have an account.jcq(h{63aryd8jbbozqi[(pg_media_dl_1.png Bloomberg(Bloomberg) — US stock futures retreated as worries over artificial-intelligence spending weighed on sentiment while oil prices closed in on $100 a barrel. Traders braced for more key earnings from Intel Corp., due later in the afternoon.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountFutures contracts tied to the S&P 500 Index were down 0.6% as of 7:55 a.m. in New York, while Nasdaq 100 futures dropped 0.8%, weighed down Alphabet Inc. and Tesla Inc. An exchange-traded fund tracking chipmakers fell 0.7% ahead of the opening bell. Equities came under pressure as Alphabet fell 5% premarket after the Google parent gave an outlook for capital expenditures that was higher than expected, fanning fears about the pace of AI spending. The increase in capex comes as the company’s free cash flow turned negative, amplifying worries about the so-called hyperscaler’s lofty spending. Tesla declined 6.7% after its profit tumbled despite a strong quarter for its automotive business. Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againAlphabet and Tesla led losses in the so-called Magnificent Seven companies. Among other individual shares, Nvidia Corp. fell nearly 1% premarket. Meta Platforms Inc. and Apple Inc. declined 1.7% and 0.9%, respectively. “High expectations make second quarter company guidance especially important,” wrote Rob Haworth, senior investment strategy director at US Bank Asset Management. “We expect AI infrastructure spending and consumer demand to remain strong, while company forecasts will help determine whether investors rotate among sectors rather than retreat from stocks.”Shares of companies tied to the AI infrastructure trade, however, rose after Alphabet said in its earnings call that the company plans to expand use of third-party capacity in the third quarter. For instance, CoreWeave Inc. and Nebius Group NV respectively rose 1% and 2.2% premarket, while Micron Technology Inc. and Western Digital Corp. both advanced. US-listed shares of SK Hynix Inc. climbed 4.5% ahead of the opening bell.Intel, meanwhile, is expected to report strong second-quarter earnings after the market close Thursday, but even blowout results likely won’t be enough to reverse the stock’s July slide. Intel shares rose 0.7% premarket.Energy shares advanced as oil prices jumped for a fifth day, as the intensifying war with Iran pushed Brent crude over $98 a barrel after the Iran-backed Houthis claimed their first attack on commercial ships in recent months. That’s pushed government bond yields higher, reflecting fears that inflation could heat up again and, in turn, weighing on stock prices since they raise costs for most businesses and erode their profits. American Airlines Group Inc. shares fell 3.6% premarket after said it may report a loss this year amid persistently high fuel prices because of the war in Iran.Elsewhere, Albertsons tumbled 17% premarket after cutting its adjusted earnings per share guidance for the full year. Meantime, Rollins Inc. shares sank 17% after the pest control company reported results that fell short of expectations.Lockheed Martin Corp. jumped 5.5% premarket after the company raised its full year sales forecast. Meanwhile, ServiceNow Inc. rallied 5.9% after the software company reported second-quarter results that beat expectations and gave an outlook for current remaining performance obligation that is seen as positive. This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.