U.S. equity futures signalled a mixed opening for Wall Street as investors weighed major technology earnings, ongoing weakness in software stocks and upcoming monetary policy decisions in Europe. Alphabet (NASDAQ:GOOG) drew strong attention after indicating it may significantly increase spending to accelerate its artificial intelligence ambitions. Market focus is also turning toward results from Amazon (NASDAQ:AMZN), due after the closing bell. Meanwhile, precious metals prices declined as currency strength pressured commodities.
U.S. futures point to uncertain open
As of early trading, futures tied to the Dow Jones Industrial Average were modestly lower, while S&P 500 and Nasdaq 100 futures posted slight gains.
Major U.S. indices finished the previous session without a clear direction as investors searched for signs that recent losses in software stocks could stabilise. Companies linked to AI-related hardware also experienced selling pressure.
Technology shares, long viewed as key beneficiaries of the artificial intelligence boom, have recently faced concerns that the rapid evolution of AI could disrupt parts of the sector. A software sector index has recorded one of its weakest relative performances against the S&P 500 since the early 2000s.
Analysts have suggested the sector is becoming increasingly polarised, with some companies expected to emerge as major AI beneficiaries while others could struggle to adapt.
Alphabet ramps up AI investment strategy
Alphabet appears to be strengthening its position in the global artificial intelligence competition following strong quarterly results from its Google business.
Previously seen as trailing OpenAI, the developer behind ChatGPT, Alphabet is now showing early signs of generating measurable returns from its substantial AI spending. Unlike OpenAI, which continues to operate at a loss, Alphabet is demonstrating revenue growth linked to its AI initiatives.
“Overall, we’re seeing our AI investments and infrastructure drive revenue and growth across the board,” CEO Sundar Pichai said.
Alphabet’s Gemini AI platform recorded 750 million monthly active users during the December quarter, closing the gap with ChatGPT, which reported more than 800 million users in October.
Company executives signalled that capital expenditure could potentially double this year, reaching between $175 billion and $185 billion, as Alphabet accelerates expansion of advanced data centres and semiconductor infrastructure supporting AI development. Although some investors initially expressed concern over the scale of spending, strong performance in Google’s cloud segment and other divisions helped reassure markets.
Alphabet shares moved slightly lower in extended trading but recovered from earlier declines.
Amazon earnings expected to highlight AI progress
Attention is shifting to Amazon, which has also made artificial intelligence a central element of its long-term growth strategy.
Amazon Web Services remains a major contributor to revenue, but investors are closely watching the company’s progress in AI development. Some market participants have viewed Amazon as trailing certain competitors in AI innovation, which has affected sentiment around the stock. Despite its role as one of the technology giants that have supported years of equity market gains, Amazon’s share price has slipped slightly over the past year.
However, Amazon previously reported revenue gains linked to AI services and announced plans to rapidly expand its global data centre infrastructure.
For the critical holiday quarter, analysts expect AWS net sales to grow by approximately 21%, excluding currency effects. Total revenue is forecast to reach around $211.49 billion, with earnings per share estimated at $1.96.
Central bank policy decisions in focus
Outside corporate developments, investors are closely monitoring monetary policy decisions in Europe. The European Central Bank is widely expected to leave interest rates unchanged at 2%, marking a fifth consecutive meeting without adjustments. However, the recent drop in eurozone inflation may increase pressure on policymakers.
Latest data showed eurozone consumer inflation slowed to 1.7% year-on-year in January, falling below the ECB’s 2% target.
Economists at Deutsche Bank noted that while rates are expected to remain unchanged through 2026, risks continue to point toward “further easing given the expected undershoot of the inflation target.”
They also highlighted that recent euro strength against the U.S. dollar reinforces this risk, although the argument for additional rate cuts “has not been proven yet.”
The Bank of England is similarly expected to hold its benchmark rate at 3.75%, with analysts citing persistent inflation pressures despite signs of a moderating labour market.
Precious metals retreat as dollar strengthens
Gold prices declined after reversing earlier gains, while silver dropped sharply following a brief recovery earlier in the week.
Weakness across metals resumed as the U.S. dollar strengthened ahead of European central bank announcements, placing downward pressure on commodity prices.
Silver experienced the steepest declines among precious metals, with spot prices falling significantly during Asian trading. The drop followed heavy selling in Chinese futures markets, which spilled over into global spot markets and erased much of the recent rebound.
“Even as prices of precious metals are now less elevated following the correction, sensitivity to the [dollar], yield repricing, and uncertainty around Fed policy under new leadership remains high. While positioning has likely reset to some extent, confidence may not have fully restored, pointing to a potential period of choppier, two-way trading,” Christopher Wong, FX strategist at OCBC said.
