US Stock Futures Slip on Alphabet, Oil Advances: Markets Wrap

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePMN BusinessUS Stock Futures Slip on Alphabet, Oil Advances: Markets WrapUS equity-index futures declined after Alphabet Inc.’s spending plans intensified concerns about the payoff from the industry’s aggressive artificial intelligence buildout. Oil extended its rally.Author of the article:Last updated 4 minutes ago You can save this article by registering for free here. Or sign-in if you have an account.fzoicmw8yd0jf0}}(0qllv42_media_dl_1.png Bloomberg(Bloomberg) — US equity-index futures declined after Alphabet Inc.’s spending plans intensified concerns about the payoff from the industry’s aggressive artificial intelligence buildout. Oil extended its rally.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 AccountContracts for the tech-heavy Nasdaq 100 Index fell 0.5%, with Alphabet Inc. sliding more than 3% in extended trading after raising its capital spending for the year. International Business Machines Corp. slipped after lowering its full-year sales outlook, while Tesla Inc. fell 4% after missing estimates, as disappointing megacap earnings weighed on sentiment. Futures indicated a mixed open for Asian stocks.Attention is also on oil prices after Iran-backed Houthi militants said they targeted two Saudi Arabian tankers in the Red Sea, escalating the Middle East conflict and threatening deeper supply disruptions. West Texas Intermediate rose over 1% to almost $88 a barrel, a fifth consecutive day of advances.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 againOil’s gains sent Treasuries lower, with the two-year yield rising four basis points. The US 30-year bond yield has held above 5% for the longest stretch since the dawn of the financial crisis, echoing investor concerns about a growing debt pile and sticky inflation. Alphabet’s results mark the start of a critical test for the AI trade. After last week’s technology selloff, which sent a gauge of chipmakers into a bear market, earnings over the next two weeks will be scrutinized for signs that hundreds of billions of dollars invested in AI are beginning to generate commensurate returns.“We remain constructive on AI’s growth story, but we favor a more balanced exposure across the AI value chain — from semiconductors and hardware to megacap tech and more defensive areas of the industry,” said Ulrike Hoffmann-Burchardi at UBS Chief Investment Office. “Investors should also ensure diversification beyond AI.”Alphabet now expects capital spending to reach as much as $205 billion this year, eclipsing its previous guidance and far exceeding Wall Street expectations. The company is accelerating investment in AI computing capacity to meet surging demand, executives said in a call with analysts.As the first US megacap tech company to report earnings this season, Alphabet is setting the tone for a sector that has collectively committed hundreds of billions of dollars to AI infrastructure. Investors will be watching next week’s results from Microsoft Corp., Meta Platforms Inc. and Amazon.com Inc. for guidance on capital spending.“AI optimism remains intact, but the burden of proof has shifted decisively onto management teams,” wrote Mark Malek, chief investment officer at Siebert Financial. “Future earnings calls will increasingly focus on return on invested capital rather than AI ambitions.”In Asia, the yen will remain in focus after sliding to its weakest level since 1986 earlier this week.While the Bank of Japan is widely expected to move rates roughly once every six months, it’s open to moving earlier than that timeframe if needed, people familiar with the matter said, pointing to signs that inflation is becoming entrenched. This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.“Japanese policymakers are facing an uphill battle to support the yen while the price of oil jumps back up towards $100 per barrel,” said MUFG Bank strategist Lee Hardman.Geopolitical tensions also remained in focus. President Donald Trump vowed to hit Iranian bridges and power plants if Tehran continued attacking vessels in the Strait of Hormuz. Iran responded with its own warning. The renewed escalation has fueled concerns that higher energy prices could keep inflation elevated and complicate the Federal Reserve’s policy outlook. With the central bank meeting next week, money markets are pricing about a 30% chance of a rate increase and a 70% probability that policymakers hold steady.“Diplomatic efforts to end the conflict in the Middle East have effectively stalled as military strikes continue with no sign of easing,” said Ian Lyngen at BMO Capital Markets. “The rally in energy continues to weigh on the Treasury market as hostilities between the US and Iran intensify.”Texas Instruments Inc., the biggest maker of analog and embedded processing chips, gave a sales forecast that topped estimates but failed to excite investors, who have bid up the company’s shares this year.ServiceNow Inc. reported better-than-expected quarterly sales and bookings, boosting Wall Street’s hopes that the software maker’s new AI tools will spur growth.Southwest Airlines Co. provided an outlook for the full year that exceeded projections, even as operating revenue for the second quarter missed analysts’ estimates.Some of the main moves in markets:S&P 500 futures fell 0.3% as of 8:15 a.m. Tokyo timeHang Seng futures rose 0.3%S&P/ASX 200 futures rose 0.8%The Bloomberg Dollar Spot Index was little changedThe euro was little changed at $1.1409The Japanese yen was little changed at 163.12 per dollarThe offshore yuan was little changed at 6.7736 per dollarThe Australian dollar fell 0.1% to $0.6990Bitcoin was little changed at $65,873.91Ether was little changed at $1,926.39Australia’s 10-year yield was little changed at 4.98%West Texas Intermediate crude rose 1.3% to $87.92 a barrelSpot gold fell 0.2% to $4,124.04 an ounceThis story was produced with the assistance of Bloomberg Automation. 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