U.S. equity futures edged higher, even as a sharp downturn in software stocks continued to weigh on market sentiment and investors braced for earnings from the biggest technology names. Attention is firmly on Google parent Alphabet (NASDAQ:GOOG), which is set to report quarterly results after the market opens, with its artificial intelligence spending plans expected to be a key focus. Elsewhere, reports said Federal Reserve Governor Stephen Miran has stepped down from his role as a White House economic adviser, while fresh data on U.S. services activity is due and gold prices have climbed back toward $5,100 an ounce.
Futures edge up despite tech sell-off
U.S. stock futures traded modestly higher early Wednesday as markets balanced renewed pressure on AI-linked software shares against anticipation of results from mega-cap technology companies.
By 02:53 ET, Dow futures were up 134 points, or 0.3%, S&P 500 futures had added 19 points, or 0.3%, and Nasdaq 100 futures were higher by 57 points, or 0.2%.
Wall Street closed sharply lower in the previous session, led by steep declines in AI heavyweights Nvidia (NASDAQ:NVDA) and Microsoft (NASDAQ:MSFT), both of which fell close to 3%. Sentiment toward software stocks has weakened in recent days, as investors grow increasingly concerned about rising competition from newly launched AI models.
Those worries intensified after artificial intelligence firm Anthropic unveiled a new legal-analysis tool, triggering heavy selling in publishing and data-related stocks such as Thomson Reuters (NYSE:TRI) and LegalZoom (NASDAQ:LZ). The sell-off quickly spread across the broader software sector, dragging down names including PayPal (NASDAQ:PYPL) and Expedia Group (NASDAQ:EXPE), each of which dropped more than 10%. According to the Wall Street Journal, two S&P indices tracking software, financial data and exchange companies collectively lost around $300 billion in market value.
“[T]he defining development was the collapse in technology stocks, as investors increasingly view AI as a net negative. Companies heavily exposed to aggressive infrastructure investment are no longer benefiting, while concerns about AI-driven disruption and displacement are eroding large portions of the market,” analysts at Vital Knowledge said in a note.
Not all shares were under pressure, however. Walmart (NYSE:WMT) stood out after a surge in its stock pushed the retailer’s market capitalization above $1 trillion for the first time, supported by continued market-share gains among price-conscious consumers.
Alphabet in the spotlight
With volatility rippling through the software sector, markets are now turning their attention to Alphabet’s earnings report later in the day. Investors are expected to closely scrutinize the group’s costly push into artificial intelligence, including multibillion-dollar investments in data centers and specialized chips.
Alphabet shares rallied around 29% in the final quarter of 2025, driven by positive reception of its latest Gemini AI model and a partnership with Apple to enhance the iPhone maker’s Siri voice assistant. Analysts cited by Reuters have suggested that Alphabet has now taken the lead in the race to develop and commercialize AI technologies, overtaking competitors such as Microsoft.
“Google sentiment is (justifiably) very bullish, as the company’s core advertising businesses continue to deliver strong results while it emerges as the best-positioned player across the AI ecosystem,” Vital Knowledge analysts said. They cautioned, however, that it remains unclear whether strong earnings will stabilize broader AI sentiment or instead amplify concerns about the resilience of the ecosystem surrounding rivals like OpenAI.
Further insight into the technology landscape may come on Thursday, when Amazon (NASDAQ:AMZN) is scheduled to report results. Outside the tech sector, pharmaceutical giant Eli Lilly (NYSE:LLY), which has made significant bets on weight-loss treatments, is also among the notable companies reporting ahead of the U.S. market open.
Reports: Miran exits White House adviser role
Media reports indicated that Federal Reserve Governor Stephen Miran has resigned from his position as a White House economic adviser, fulfilling a commitment he previously made to the U.S. Senate.
The move allows Miran—appointed last year by President Donald Trump to temporarily fill a vacancy on the Federal Reserve Board through January 31—to remain at the central bank until a successor is confirmed.
“I promised the Senate that if I remained on the Board beyond January, I would formally depart the Council,” Miran wrote in a resignation letter cited by several outlets, adding that it was “important to honor my word.”
Since joining the Fed, Miran has been a vocal proponent of aggressive interest-rate cuts, frequently diverging from the views of other policymakers. His stance has aligned with Trump’s calls for rapid rate reductions to stimulate the economy, drawing criticism from some Democratic senators who have urged his “immediate” resignation from the Fed board.
U.S. services data ahead
Last month, the Federal Reserve opted to keep interest rates unchanged in a range of 3.5% to 3.75%, despite dissent from Miran and Fed Governor Christopher Waller. While there are signs of softening in the labor market, inflation has remained above the Fed’s 2% target, reducing the urgency to resume the aggressive rate-cutting cycle seen in 2025.
With the monthly jobs report delayed earlier this week, investors will focus on other indicators, including January data on U.S. services activity. The Institute for Supply Management’s non-manufacturing purchasing managers’ index is expected to come in at 53.5, down from 54.4 previously. Readings above 50 signal expansion.
Gold climbs back toward $5,100
Gold prices moved higher on Wednesday, approaching $5,100 an ounce, as renewed tensions between the United States and Iran boosted demand for safe-haven assets.
The precious metal extended gains after rebounding sharply from earlier losses in the prior session.
Safe-haven demand was reinforced by reports that the U.S. shot down an Iranian drone that approached a U.S. aircraft carrier in the Arabian Sea. Separately, Iranian gunboats were seen near a U.S.-linked tanker in the Strait of Hormuz.
These developments cast doubt on earlier comments from Tehran and Washington suggesting talks would take place on Friday. News of the planned discussions had previously eased market anxiety and weighed on gold prices.
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