US equity futures moved in different directions on Thursday following quarterly earnings announcements from major technology companies and the Federal Reserve’s decision to maintain interest rates.
Nasdaq futures fell 1.3% and S&P 500 futures declined 0.5%, while Dow Jones futures gained 0.3%.
Alphabet shares dropped more than 10% before the opening bell after reporting results below expectations. Microsoft advanced following higher-than-forecast revenue and adjusted earnings, while Samsung Electronics declined after its semiconductor business missed profit estimates.
Investors were also considering comments from Federal Reserve Chair Kevin Warsh on the sensitivity of artificial intelligence investment to borrowing costs.
US Stock Futures Diverge Following Previous Session’s Gains
At 04:03 ET (08:03 GMT), Nasdaq futures were lower by 400 points, representing a decline of 1.3%.
S&P 500 futures lost 36 points, or 0.5%, while Dow Jones futures rose 150 points, equivalent to 0.3%.
The movements followed a positive session for the major US stock indices on Wednesday, when renewed demand for artificial intelligence-related shares contributed to market gains.
Several financing agreements and corporate earnings releases had supported technology stocks. Oracle’s commitment to restrict fundraising through fiscal 2030 was another development monitored by investors.
By Thursday morning, however, market attention had shifted toward the financial implications of large-scale AI investment.
Deutsche Bank analysts identified a more cautious attitude toward technology shares as “the main theme in markets”.
Alphabet Shares Lose More Than 10% Before Market Open
Alphabet (NASDAQ:GOOG) declined more than 10% in premarket trading after the Google parent published third-quarter financial results that fell short of analyst expectations.
Deutsche Bank analysts characterised the figures as “underwhelming results”.
Revenue from Google’s services operations was a principal factor behind the earnings shortfall.
Advertising revenue growth also slowed to its lowest level in five quarters.
During the earnings conference call, Alphabet executives discussed increased use of Google’s “AI Mode” search functionality.
Management indicated that revenue generated from searches using the AI feature was increasing more slowly than revenue from conventional search queries.
The difference drew attention to Alphabet’s ability to generate revenue from its expanding AI services.
Alphabet Reports $51.4 Billion in Capital Expenditure
Alphabet’s capital expenditure increased by $6.5 billion from the preceding quarter to $51.4 billion.
The higher investment spending coincided with a further decline in free cash flow, which remained negative.
Alphabet has been expanding its artificial intelligence computing capacity and related infrastructure as part of its broader technology investment programme.
The latest figures provided investors with information about the scale of spending required to support those operations.
The relationship between AI-related revenue and capital expenditure remained a subject of market attention following the earnings announcement.
Microsoft Revenue Reaches $92.28 Billion as Azure Expands 48%
Microsoft (NASDAQ:MSFT) shares rose in premarket trading after the software and cloud computing company reported financial results above consensus forecasts.
First-quarter fiscal revenue increased 19% to $92.28 billion.
Adjusted earnings per share reached $4.89, exceeding analyst expectations.
Azure, Microsoft’s cloud computing business, recorded revenue growth of 48%.
The division’s performance contributed to the company’s overall revenue increase as enterprise demand for cloud services continued.
Deutsche Bank analysts nevertheless said Microsoft’s results were “insufficient to brighten the overall gloomy tech mood this morning.”
Microsoft Offers Voluntary Employee Buyouts
Microsoft also announced a programme offering voluntary separation packages to eligible employees.
The Wall Street Journal reported that approximately 60,000 workers could qualify for the offer.
Microsoft employed 223,000 people at the end of June.
The programme was announced alongside the company’s continued investment in cloud computing and artificial intelligence infrastructure.
The supplied report did not specify the expected cost of the employee buyout initiative.
Samsung Shares Fall After Semiconductor Earnings Miss
Samsung Electronics (USOTC:SSNHZ) declined more than 4% in South Korean trading after reporting operating profit from its semiconductor division below analyst forecasts.
The share price movement followed gains earlier in the year.
Samsung also did not announce additional details concerning a potential shareholder return programme.
At the group level, the company recorded its fourth consecutive quarter of record income.
Total operating profit reached 100 trillion won, approximately $74.52 billion.
The consolidated result contrasted with the semiconductor division’s performance relative to market expectations.
Samsung Memory Chip Orders Cover Next Year’s Supply
Samsung executives said the company’s planned memory chip supply for the following year had already been fully booked.
Demand was associated with the expansion of artificial intelligence computing infrastructure and the components required to operate advanced AI systems.
Samsung supplies memory chips to Nvidia and other companies involved in AI hardware and infrastructure.
Management also indicated that constraints in the memory chip market could continue over the next several years.
According to Samsung, these supply conditions could lead to further increases in memory chip prices.
The comments provided additional context for the company’s semiconductor operations despite the division’s profit falling short of forecasts.
Warsh Questions Whether AI Investment Is Insulated From Higher Rates
Federal Reserve Chair Kevin Warsh discussed the potential influence of interest rates on artificial intelligence investment following Wednesday’s monetary policy announcement.
The Fed maintained its benchmark interest rates at their existing levels.
Warsh referred to an argument that AI projects might be relatively unaffected by higher borrowing costs because investors expected different levels of returns from the technology.
He described the argument that tighter monetary policy was “not going to have any effect on AI because the returns that investors are expecting are so different,” but said he had been “skeptical of that view.”
He added:
“Interest rates get in the cracks. Interest rates affect, directly or indirectly, almost everything,”
The remarks came as AI companies increasingly accessed bond and equity markets to finance capital-intensive infrastructure projects.
This approach represents a change from relying primarily on internally generated cash flow.
December Federal Reserve Rate Outlook Remains Under Review
Investors were evaluating the possibility of further monetary policy tightening before the end of 2026.
Market expectations indicated that the Federal Reserve could raise interest rates again in December.
The central bank previously increased borrowing costs in September, its first rate increase since 2023.
Changes in interest rates affect the financing environment for businesses undertaking large capital expenditure programmes.
The Fed chair’s comments therefore added to the discussion of how monetary policy could influence technology sector investment.
Further Technology Earnings and ECB Decision Awaited
Amazon and Intel were scheduled to publish their quarterly results after the US stock market closed on Thursday.
Their announcements were due to follow earnings releases from Alphabet, Microsoft and Samsung Electronics.
Investors were monitoring corporate spending plans, cloud computing demand, semiconductor supply and the financial returns associated with artificial intelligence infrastructure.
The European Central Bank’s interest rate decision was another scheduled event for Thursday, adding to the monetary policy developments being assessed by global financial markets.
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