Why are Stocks Down Today? July 23

TLDR

• US stock futures fell Thursday, with Dow and S&P 500 futures down 0.3% and Nasdaq-100 futures dropping 0.4%
• Alphabet and Tesla both announced heavy AI and capital spending plans, pressuring their shares in pre-market trading
• Brent crude jumped to $97 per barrel as Houthi forces attacked Red Sea tankers, escalating Middle East tensions
• Treasury yields hit their highest levels since May as rising oil prices reignited inflation fears
• Jobless claims fell to 187,000, the lowest level since 1969, well below the 215,000 economists expected

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US stock futures fell Thursday morning as investors reacted to earnings from two major tech companies and watched oil prices climb toward $100 a barrel.

Futures on the Dow Jones Industrial Average and the S&P 500 each fell around 0.3%. Nasdaq-100 futures dropped 0.4%, following a weak Wednesday session on Wall Street.

Alphabet and Tesla Spending Plans Weigh on Tech

Alphabet posted a strong quarter but raised its capital expenditure outlook, which rattled investors. Markets are watching how much Big Tech is spending on AI and whether those investments will pay off.

Tesla chief Elon Musk described 2026 as a “massive capex year” for the company. He pointed to Optimus robots, robotaxis, and data centers as the main spending areas.

Both stocks were under pressure in pre-market trading. They are part of the “Magnificent Seven” group of large tech companies that carry heavy weight in major indexes.

The added spending has renewed questions about AI’s return on investment. That uncertainty is one reason futures are lower Thursday.

Oil Climbs as Middle East Tensions Escalate

Brent crude futures rose to $97 per barrel Thursday, closing in on the $100 mark. West Texas Intermediate climbed to $89 per barrel.

The move came after Iran-backed Houthi forces said they attacked tankers in the Red Sea, widening the US-Iran conflict.

Rising oil pushed Treasury yields higher. The 10-year and 30-year yields hit their highest levels since May, raising fresh concerns about inflation.

Higher yields also pushed back on expectations for Federal Reserve rate cuts later this year.

Jobs Data Offers a Bright Spot

Not all Thursday data was negative. Only 187,000 Americans filed for initial jobless claims in the week ending July 18.

That is down 22,000 from the week before and well below the 215,000 economists had forecast.

It is the lowest reading since May 1969. The all-time record low is 162,000, set in November 1968.

Much of the drop came from New York, which reported nearly 17,000 fewer claims than the previous week.

Stephen Stanley, chief US economist at Santander, said the data follow seasonal patterns and reflect the unwinding of elevated June readings. He noted that layoffs have run slightly lower this year than in recent years.

Investors are also watching earnings Thursday from Intel, T-Mobile US, and Lockheed Martin.