U.S. equity futures are lower as investors weigh Alphabet and Tesla earnings against another surge in oil prices. Around 5:30 a.m. ET, S&P 500 futures were down 0.27%, Dow futures were down 0.31% and Nasdaq futures were down 0.23%. The small-cap setup was weaker, with the iShares Russell 2000 ETF (IWM) down approximately 0.88% premarket. Alphabet’s higher AI-spending outlook, Tesla’s profit miss and Brent crude approaching $100 are keeping pressure on risk appetite.
U.S. equities finished modestly lower Wednesday. The S&P 500 declined 0.14%, the Dow slipped 0.01%, the Nasdaq fell 0.57% and the Russell 2000 lost 0.92%. Month to date, the Dow is down 0.19%, the S&P 500 is down 0.01%, the Nasdaq is down 1.99% and the Russell 2000 is down 2.13%.
Market breadth was weaker than the relatively small index declines suggested. Decliners led advancers by 1.29:1 on the NYSE and 1.88:1 on the Nasdaq. Exchange volume totaled 11.03B shares on the NYSE and 14.45B shares on the Nasdaq, excluding regional activity.
Treasury yields rose as higher oil prices revived inflation concerns. The 2-year yield increased 4 basis points to 4.30%, the 10-year rose 3 basis points to 4.66% and the 30-year gained 2 basis points to 5.15%. The DXY eased slightly to 101.14, while the euro strengthened to $1.1412, sterling slipped to $1.3374 and the dollar remained near a multidecade high at ¥163.15.
September WTI crude rose 2.26% Wednesday to $86.25, while August gold gained 1.49% to $4,137.30. Oil extended sharply higher Thursday after Houthi forces claimed attacks on Saudi tankers in the Red Sea, adding a second potential supply chokepoint alongside the Strait of Hormuz. Brent gained more than 4% to approximately $98, intensifying concerns that energy inflation could keep global interest rates higher.
Thursday’s U.S. economic calendar includes weekly jobless claims and the June Chicago Fed National Activity Index at 8:30 a.m. ET. Initial claims are expected near 212,000 after 208,000 previously, while continuing claims were most recently 1.805 million. Investors will assess whether the labor market remains firm enough to tolerate the tightening financial conditions caused by higher oil and bond yields.
Sector Highlights
Sector performance reflected a mix of defensive demand and inflation-sensitive leadership. Utilities gained 2.29%, followed by Materials +1.45%, Energy +1.19% and Consumer Staples +0.38%. Industrials rose 0.07% and Technology was nearly unchanged at +0.01%, while Financials slipped 0.13%. The laggards were Communication Services -1.29%, Consumer Discretionary -0.84%, Health Care -0.56% and Real Estate -0.49%.
Communication Services
- Alphabet (GOOGL -3.6% premarket) reported revenue growth of 24% to $119.8B. Google Search revenue rose 17%, YouTube advertising increased 13% and Google Cloud revenue surged 82% to $24.8B, with the cloud backlog reaching $514B.
- Alphabet raised its 2026 capital-spending forecast to $195B–$205B, up from $180B–$190B, shifting the market’s focus from strong operating growth toward free cash flow and the prospective return on AI infrastructure investment.
- Comcast (CMCSA +2.5%) rose after adjusted earnings and revenue beat expectations, offsetting the loss of 167,000 residential broadband customers.
Consumer Discretionary
- Tesla (TSLA -4.5% premarket) missed adjusted profit expectations and reported negative free cash flow of $1.1B as quarterly capital expenditures more than doubled to $5.8B. Revenue reached $28.24B, but automotive gross margin was 16.3%, below expectations.
Information Technology
- IBM (IBM +3% premarket) gained despite cutting its annual revenue-growth forecast to 4%–5%. Second-quarter revenue increased 1% to $17.16B, while management said customers had prioritized spending on AI infrastructure over software and mainframe purchases.
- Intel (INTC) reports after the close. Investors will focus on data-center demand, foundry losses, PC-market trends and whether AI-related server spending can offset weaker traditional semiconductor demand.
- STMicroelectronics (STM) fell sharply in European trading despite raising its AI data-center revenue target, another example of strong underlying demand failing to clear elevated semiconductor expectations.
Industrials
- Lockheed Martin (LMT) reports before the open, with investors focused on missile demand, production capacity, program execution and the impact of continued geopolitical conflict on the company’s backlog.
Financials
- Blackstone (BX) reports before the opening bell. Fundraising, asset sales, credit conditions and fee-related earnings will provide a read on private-market activity as long-term borrowing costs remain elevated.
