U.S. equity futures traded lower on Friday as investors balanced weaker-than-expected guidance from Netflix (NASDAQ:NFLX), renewed concerns over artificial intelligence spending and escalating tensions between the United States and Iran.
At 02:57 ET (06:57 GMT), Dow Jones futures were down 336 points, or 0.6%, while S&P 500 futures lost 66 points, or 0.9%. Nasdaq 100 futures led the declines, falling 488 points, or 1.7%.
Wall Street ended Thursday’s session in negative territory, with the Dow Jones Industrial Average slipping 0.2%, the S&P 500 falling 0.5% and the Nasdaq Composite retreating 1.47%.
Market attention remained firmly focused on the technology sector. Analysts at Vital Knowledge said investors continue to question the sustainability of heavy AI investment and the financial returns expected from the industry’s rapid expansion.
Vital Knowledge analysts wrote: “[T]he list of things worrying people will sound familiar to anyone following the space: the absence of free cash flow for hyperscalers/neoclouds, costs that seem to scale higher with revenue, the reliance on capital markets […] to fund capex […], the huge pipeline of debt/equity supply that’s washing over markets, the increasingly poor financial/fundamental prospects for bleeding edge frontier labs […], and questions about data center overcapacity.”
Netflix guidance disappoints investors
Netflix (NASDAQ:NFLX) fell more than 8% in extended trading after issuing third-quarter guidance that failed to meet market expectations.
The streaming company forecast earnings per share of $0.82, below analysts’ consensus of $0.84, while expected revenue of $12.86 billion also missed estimates of $13.0 billion.
Despite the softer guidance, Netflix told investors that its business “remains solid” and said it is “on track to meet our objectives for the year.”
The company also confirmed that, beginning in January 2027, viewing-hours data will be published annually instead of twice each year, continuing its strategy of placing greater emphasis on financial performance rather than engagement metrics.
Earnings season continues
Investors are also preparing for fresh quarterly updates from The Travelers Companies (NYSE:TRV), Truist Financial Corporation (NYSE:TFC), Fifth Third Bancorp (NASDAQ:FITB) and Regions Financial Corporation (NYSE:RF).
According to Vital Knowledge, management commentary across corporate America has remained broadly constructive despite concerns surrounding AI spending, energy markets and geopolitical uncertainty.
Recent U.S. economic data have also remained supportive, with resilient retail sales, lower jobless claims, stronger regional manufacturing activity and softer-than-expected inflation readings.
Oil rises as conflict escalates
Military exchanges between the United States and Iran continued for a sixth consecutive day, with both sides launching new strikes.
U.S. Central Command said its latest operations were designed to weaken Iranian military capabilities while “holding Iran accountable” for attacks on commercial shipping.
Iranian media reported damage to civilian infrastructure, including bridges and a railway station, while renewed uncertainty surrounding shipping through the Strait of Hormuz supported oil prices.
Brent crude gained 0.7% to $84.81 per barrel, while West Texas Intermediate rose 1.0% to $79.76.
SpaceX postpones Starship test
SpaceX (NASDAQ:SPCX) delayed the launch of its Starship rocket after several engines failed to ignite properly during the countdown in Texas.
Chief Executive Elon Musk suggested another launch attempt could take place next week. Shares fell more than 4% in after-hours trading following the announcement.
Leave a Reply