US Markets — Nasdaq Futures Fall as Investors Reassess AI Boom and Big Tech Earnings
US stock futures declined on Thursday as investors evaluated corporate earnings, artificial intelligence spending and the interest rate outlook following the Federal Reserve’s latest policy decision.
Nasdaq 100 futures dropped 1.22%, while S&P 500 futures fell 0.41%. Dow futures moved higher, gaining 0.35%.
Alphabet was among the biggest contributors to the weakness in technology stocks. Its shares plunged 10.5% in premarket trading after its search advertising performance fell short of investor expectations. Rising investments in AI infrastructure also heightened concerns about the company’s ability to generate cash.
Microsoft offered a contrasting picture, with its shares advancing 3.5% after the company reported stronger-than-expected cash flow and projected solid cloud growth. Its results provided evidence that some leading technology companies are beginning to convert growing AI demand into financial gains.
The contrasting market reactions highlighted a shift in investor sentiment toward the technology sector. Rather than rewarding companies simply for expanding computing capacity, investors are increasingly focused on when expensive AI infrastructure investments will produce adequate returns.
The downturn also affected companies beyond the largest technology firms. Cybersecurity provider Fortinet plunged 25.4% after releasing its third-quarter results, while software company ServiceNow fell 19% after failing to meet third-quarter profit estimates. Zscaler and Salesforce also faced selling pressure.
Chipmakers recorded losses as well. Nvidia declined 1%, AMD dropped 3.3% and Intel slipped 3.6%.
Marvell Technology shares fell 9.4% following media reports that the company was in advanced discussions to acquire data-center optics manufacturer Lumentum Holdings. Lumentum gained 4.3%. Neither company immediately responded to Reuters’ requests for comment.
Investors were also assessing the Federal Reserve’s policy outlook. On Wednesday, the central bank kept its benchmark interest rate unchanged within a range of 3.75% to 4.00% as officials awaited additional inflation data.
Despite the decision to hold rates steady, market participants considered the possibility of tighter monetary policy later in the year. According to the CME FedWatch Tool, traders assigned more than an 81% probability to a December rate increase, amid persistent inflation and rising oil prices linked to the Middle East conflict.
Markets were awaiting the September Personal Consumption Expenditures inflation report and third-quarter gross domestic product figures for additional indications of economic conditions and the Federal Reserve’s next policy move.
Several major companies were also scheduled to release earnings after Thursday’s market close, including Intel and Amazon.
Outside the technology sector, Carvana shares climbed 9.2% after the company reported third-quarter revenue above estimates. Chipotle Mexican Grill advanced 6.7% after posting stronger-than-expected quarterly comparable sales.
The combination of mixed corporate earnings, concerns over the profitability of AI investments and uncertainty surrounding borrowing costs left investors weighing individual company performance against the broader economic outlook.
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