Nasdaq 100 futures fell on Thursday after Alphabet and Microsoft posted mixed earnings that left investors weighing the payoff from heavy AI spending. Alphabet dropped 10.5% premarket while Microsoft gained 3.5%, and traders turned to an inflation reading after the Fed held rates.
Nasdaq 100 E-minis were down 365 points, or 1.22% at 4:09 a.m. ET on Thursday. Mixed results from Alphabet and Microsoft left investors weighing what heavy AI spending is returning, according to Reuters.
Dow E-minis were up 185 points, or 0.35%, while S&P 500 E-minis were down 31 points, or 0.41%.
Alphabet falls, Microsoft rises
Alphabet slid 10.5% in premarket trading after it reported disappointing results in its core search advertising business and a sharp acceleration in cash burn as it built out AI.
Microsoft, however, climbed 3.5% after a big cash-flow beat and a forecast for strong cloud growth. Reuters described the results as fresh evidence that its AI bets were working.
Jeremy Saltzberg of Check Capital Management said investors are starting to scrutinize monetization timelines against capital expenditure burn rates.
Software and chip stocks slide
Fortinet tumbled 25.4% after third-quarter results, and ServiceNow dropped 19% after missing third-quarter profit estimates. Zscaler and Salesforce were among the laggards in sector-wide software weakness.
Semiconductors also traded lower. Nvidia was down 1%, AMD slid 3.3% and Intel was off 3.6%. Marvell Technology fell 9.4% after media reports said it is in advanced talks to buy Lumentum Holdings, whose shares rose 4.3%.
Inflation data follows the Fed hold
The Federal Reserve held interest rates steady on Wednesday, as expected, delaying any change until after next week's US midterm elections while it awaits more data on inflation. Jon Butcher of Aberdeen said the hold looks like a short pause ahead of a likely policy hike in December.
Focus now turns to the September Personal Consumption Expenditures report, due later in the day, along with a third-quarter GDP reading. Traders see a more than 81% chance of a December rate hike, according to the CME FedWatch Tool, and LSEG data shows markets pricing another rate hike by mid-2027.
Source: Investing.com
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