Alphabet and Tesla Earnings Send Stock Futures Lower as AI Spending Concerns Rise

TLDR

• US stock futures fell Thursday, with Nasdaq futures dropping 0.5–0.7%
• Alphabet missed EPS estimates and raised 2026 capex to $195–$205 billion, turning free cash flow negative for the first time
• Tesla missed Q2 bottom-line figures and also turned cash flow negative amid AI and robotics spending
• Rising oil prices pushed Brent crude near $100 a barrel, lifting Treasury yields and stoking inflation fears
• Intel, Lockheed Martin, and RTX are among key earnings due Thursday

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US stock futures dropped Thursday morning as investors reacted to disappointing earnings from two of the market’s biggest names and rising tensions in the Middle East pushed oil prices higher.

Futures on the S&P 500 fell around 0.4–0.5%. Nasdaq 100 futures dropped as much as 0.7%. Dow Jones futures slid roughly 0.4–0.6%.

The moves followed a mixed session on Wall Street Wednesday, where tech stocks came under pressure.

Alphabet and Tesla Miss the Mark

Alphabet reported second-quarter results that missed adjusted earnings per share estimates. The company also raised its 2026 capital expenditure forecast by $15 billion, bringing the range to between $195 billion and $205 billion.

Alphabet said strong demand for its AI and cloud services justified the spending increase. Google Cloud growth beat expectations in the quarter.

But the company turned free cash flow negative for the first time in its history. That spooked investors already worried about the cost of AI investment across the sector.

Alphabet shares fell around 2.4% in aftermarket trading Wednesday.

Tesla also disappointed. The electric vehicle maker missed bottom-line expectations for the June quarter and turned cash flow negative as well.

Tesla’s core EV sales did improve in the quarter. But higher spending on AI, robotics, and data centers weighed on overall earnings and squeezed margins in its automotive business.

CEO Elon Musk said 2026 would be a “massive capex year,” with a focus on Optimus robots, robotaxis, and data centers. Tesla shares slid nearly 4% after hours.

Oil Climbs as Middle East Conflict Widens

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

The jump followed Iran-backed Houthi attacks on tankers in the Red Sea. President Donald Trump also threatened to strike civilian infrastructure in Iran, widening the US-Iran conflict.

Higher oil prices pushed US Treasury yields to their highest levels since May. The 10-year and 30-year yields both rose as inflation concerns returned.

The move pushed back against expectations that the Federal Reserve might ease interest rates this year.

More Earnings Ahead

Intel is set to report later Thursday. Analysts expect its earnings to have improved from last year, helped by growing AI chip demand. Intel has lagged rivals in the AI chip race but is seen narrowing that gap in 2026.

Defense contractors RTX and Lockheed Martin are also due to report, along with copper miner Freeport-McMoRan and gold miner Newmont.

Investors are also watching the 8:30 a.m. ET release of weekly jobless claims data.