US equity futures pointed to further losses for technology stocks on Friday as investors responded to disappointing corporate forecasts, rising artificial intelligence infrastructure costs and a major security breach at cryptocurrency exchange Binance.
Nasdaq 100 futures declined 646 points, or 2.2%, by 04:04 ET (08:04 GMT), extending the negative sentiment that had weighed on technology shares during the previous session.
S&P 500 futures fell 78 points, representing a 1.0% decline, while Dow Jones futures slipped 21 points, or 0.1%.
Market attention remained focused on the financial implications of aggressive AI investment programmes, alongside earnings announcements from Amazon (NASDAQ:AMZN) and Intel (NASDAQ:INTC).
A reported $6.3 billion cryptocurrency theft at Binance and the Bank of Japan’s latest monetary policy announcement added to an eventful trading session.
Technology Selloff Extends as Investors Question AI Spending
The Nasdaq Composite declined 1.38% on Thursday, with losses concentrated among major technology companies exposed to artificial intelligence investment.
Alphabet (NASDAQ:GOOG) suffered its largest single-day decline in market value, losing more than $500 billion in capitalisation.
The selloff followed investor concerns about the company’s commitment to substantial AI infrastructure expenditure at a time when growth in its core search advertising operations had slowed to its weakest pace in five quarters.
Microsoft (NASDAQ:MSFT) also finished lower as markets examined the financial returns being generated by its AI investments.
Alphabet, Microsoft and Meta Platforms (NASDAQ:META) have continued pursuing extensive infrastructure expansion, even as investors increasingly question the relationship between spending levels and profitability.
Microsoft’s completion of a $25 billion bond offering further highlighted the growing importance of debt financing within the technology industry.
Major companies are increasingly turning to capital markets to help fund data centre construction and related infrastructure, rather than relying exclusively on internally generated cash flow.
The shift has raised concerns about financing costs, balance sheet exposure and the sustainability of investment programmes.
As technology shares weakened, demand increased for US Treasury securities, reflecting a move towards assets traditionally considered more defensive.
Binance Freezes Assets Following $6.3 Billion Cryptocurrency Hack
Cryptocurrency markets experienced additional volatility after Binance disclosed a cyberattack involving approximately $6.3 billion in stolen digital assets.
The incident was described as the largest theft in the history of the cryptocurrency industry.
Binance reported that stablecoin issuers, including Tether and Circle, had frozen approximately half of the stolen assets.
Analysts raised the possibility that TraderTraitor, a sophisticated hacking group, was responsible for the breach, although this had not been established conclusively.
The exchange temporarily halted all withdrawals while coordinating with law enforcement agencies and working to address security vulnerabilities.
Binance said it expected withdrawals to resume by Sunday and committed to covering the losses associated with the attack.
The company stated that “user funds are safe.”
The breach has renewed concerns about the operational security of cryptocurrency exchanges as the digital asset industry seeks broader adoption by traditional financial institutions.
Bitcoin fell 2.6% to approximately $78,001.80, after briefly trading below $77,000 for the first time in more than a month.
The decline reflected the negative reaction across cryptocurrency markets following the announcement.
Amazon Shares Fall as Slower Retail Growth Overshadows Cloud Performance
Amazon (NASDAQ:AMZN) shares dropped more than 6% in premarket trading after the company’s latest financial results highlighted slower expansion in online retail and advertising.
Online store revenue increased by just 2%, returning to growth levels comparable with those seen after physical retailers reopened following the COVID-19 pandemic.
Advertising revenue rose 11%, marking its weakest growth since Amazon began disclosing the business separately in 2022.
The company attributed part of the slowdown to the timing of Prime Day, which was held in the second quarter rather than the third quarter as in the previous year.
Amazon Web Services delivered a stronger performance, generating approximately $46 billion in revenue during the three months ended September.
The cloud computing division recorded its fastest growth rate in several years, supported by demand for its services.
However, the positive contribution from AWS was overshadowed by concerns about Amazon’s investment requirements.
The company maintained its plan to spend approximately $220 billion on capital expenditure during the year.
Meanwhile, free cash flow over the preceding twelve months had turned negative, highlighting the financial impact of the group’s investment programme.
Investors remained concerned about how quickly the expansion of AI infrastructure would translate into stronger cash generation.
Intel Loses More Than a Quarter of Its Value on Weak Forecast
Intel (NASDAQ:INTC) shares declined by more than 25% before the US market opened after the company issued a disappointing fourth-quarter financial outlook.
The chipmaker forecast quarterly revenue of between $15 billion and $16 billion, falling short of the approximately $17 billion expected by analysts, according to Bloomberg-cited estimates.
Intel also projected adjusted earnings of $0.25 per share, below market expectations.
The company continued to face challenges from weaker personal computer demand and supply constraints affecting chips used in data centres.
The global shortage of memory components has placed additional pressure on the PC industry, with strong demand from AI data centres contributing to tighter supplies.
These shortages have complicated production and purchasing decisions for computer manufacturers, affecting shipments and demand.
Intel’s outlook reinforced concerns about the wider semiconductor industry at a time when investors were already reassessing the financial implications of rapid AI infrastructure expansion.
Bank of Japan Leaves Interest Rates Unchanged
The Bank of Japan maintained its overnight interest rate at 1.25% on Friday, matching market expectations.
Eight members of its nine-person monetary policy board supported the decision, while Takata Hajime voted for a 25-basis-point increase.
The outcome reflected the central bank’s continued assessment of domestic inflation and the appropriate pace of monetary policy normalisation.
Capital Economics interpreted the accompanying statement as evidence that Japanese policymakers had become more confident about overcoming the country’s longstanding difficulties with persistently low inflation.
The assessment suggested that additional interest rate increases could remain under consideration.
For investors, the decision provided another indication of the direction of Japanese monetary policy following years of exceptionally accommodative financial conditions.
Japanese Central Bank Speeds Up ETF Portfolio Reduction
The Bank of Japan also announced an increase in the pace at which it intends to sell exchange-traded funds accumulated under earlier monetary stimulus programmes.
The central bank plans annual ETF sales of approximately ¥860 billion, based on book value.
According to Reuters, the revised programme would shorten the estimated period required to dispose of the holdings to around 43 years.
The previous estimated timeframe was 112 years.
The accelerated disposal programme represents a further step towards reducing the central bank’s extensive holdings of financial assets.
Investors will be monitoring the potential effects of these sales on Japanese equity markets and broader financial conditions.
Globally, however, attention remains concentrated on the technology sector and the sustainability of substantial AI-related capital expenditure.
With Nasdaq futures pointing sharply lower, market participants face renewed uncertainty over corporate earnings, financing costs and the financial returns from artificial intelligence investment.
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