US equity futures traded slightly lower on Wednesday as investors prepared for a crucial day of corporate earnings led by Alphabet, Texas Instruments and Tesla, while higher oil prices and geopolitical tensions continued to shape market sentiment.
The combination of major technology results, artificial intelligence spending expectations and rising energy costs is expected to set the tone for financial markets in the coming sessions.
Markets await key technology earnings
Wall Street futures pointed modestly lower ahead of the opening bell after US equities closed higher on Tuesday, supported by gains across the semiconductor sector.
The Philadelphia Semiconductor Index advanced more than 5%, marking its strongest daily performance in a month as investors continued to back companies expected to benefit from growing AI investment.
Alphabet’s outlook on AI spending in focus
Alphabet (NASDAQ:GOOG) will publish second-quarter earnings after markets close, with investors expected to scrutinise both financial performance and capital expenditure plans.
The Google parent remains one of the largest investors in artificial intelligence infrastructure, including data centres and custom semiconductors. While these investments are intended to strengthen long-term growth, investors continue to debate when they will begin generating meaningful returns.
BofA Securities believes Alphabet could raise its planned 2026 capital expenditure to between $190 billion and $200 billion, reflecting stronger AI demand and higher memory chip prices.
The broker added that “see Alphabet well positioned to drive outsized growth [and] cloud margin upside given favorable AI positioning across models, silicon, consumer [and] enterprise distribution.”
Wall Street forecasts cited by BofA Securities point to quarterly revenue of approximately $101 billion and earnings per share of $2.90.
Chip sector and Tesla also under the spotlight
Texas Instruments (NASDAQ:TXN) is expected to provide another important update on semiconductor demand, with analysts viewing its results as a useful indicator of broader industry conditions.
The company forecasts quarterly revenue between $5 billion and $5.4 billion, alongside earnings per share of $1.77 to $2.05.
Tesla (NASDAQ:TSLA) will also report after the close, with markets anticipating its first quarterly cash burn in more than two years as the company accelerates investment in artificial intelligence, autonomous vehicles and robotics.
Oil prices remain elevated
Crude oil prices continued to strengthen following another round of US military strikes on Iranian targets, adding to concerns over supply disruptions in the Middle East.
Brent crude traded above $94 per barrel, while WTI remained above $87, extending a multi-session rally that has increased concerns over inflation and interest rates.
Investors will continue monitoring corporate earnings, developments in the AI sector and geopolitical risks as markets look for the next major catalyst.
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