Wall Street futures dipped on Wednesday as investors processed a mix of corporate earnings and lingering uncertainty over U.S.-China trade negotiations. Despite President Trump’s tariff delay for Mexico and Canada, a 10% levy on China took effect Tuesday, with Beijing’s response seen as measured, possibly setting the stage for future talks. However, Trump indicated he’s in no rush to engage with President Xi.
As of early trading:
- S&P 500 futures fell 25 points (-0.4%)
- Nasdaq 100 futures dropped 138 points (-0.6%)
- Dow futures declined 65 points (-0.2%)
Markets had closed higher Tuesday, supported by better-than-expected corporate earnings, with over 75% of S&P 500 companies beating estimates so far.
Alphabet’s AI Spending Sparks Selloff
Alphabet (NASDAQ:GOOGL) announced plans to invest $75 billion in artificial intelligence this year, far exceeding the $58 billion analysts expected. This follows last week’s buzz around Chinese startup DeepSeek, which claimed its low-cost AI rivaled OpenAI’s ChatGPT.
Adding to investor concerns, Google Cloud revenue grew 30% year-over-year to $11.96 billion, but missed forecasts of $12.16 billion, slowing from the prior quarter’s 35% growth.
Alphabet shares fell over 7% in extended trading as investors worried about the cost-effectiveness of heavy AI investments.
Snap Surprises with Strong Earnings
Snap (NYSE:SNAP) soared 5% after-hours after reporting earnings that smashed expectations:
- EPS of $0.16, beating a projected loss of $0.04
- Revenue of $1.56 billion, slightly above the expected $1.55 billion
- Daily Active Users (DAUs) hit 453 million, projected to grow to 459 million in Q1
CEO Evan Spiegel credited improvements in ad performance for driving revenue growth.
AMD Data Center Revenue Misses Expectations
AMD (NASDAQ:AMD) dropped in after-hours trading after reporting $3.9 billion in data center revenue, below estimates of $4.15 billion.
CEO Lisa Su did not provide specific guidance on AMD’s high-end AI chip sales but forecasted “tens of billions” in revenue over the next few years.
Gold Hits Record, Oil Slips
- Gold reached an all-time high on safe-haven demand, fueled by U.S.-China trade fears and geopolitical uncertainty following Trump’s remarks about Gaza.
- Oil prices dropped after higher-than-expected U.S. crude inventory data added to concerns over potential global economic slowdowns.
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