- US stock futures showed mixed signals amid rising crude prices and AI spending worries
- Nasdaq futures dropped 0.34%, S&P 500 futures remained steady, Dow futures rose 0.28%
- Crude oil prices increased due to Houthi attacks on Saudi energy sites, raising supply fears
US stock futures were mixed on Tuesday as rising crude oil prices, renewed concerns over artificial intelligence spending and a busy corporate earnings calendar kept investors cautious after Wall Street rebounded in the previous session. Nasdaq 100 futures fell 0.34%, while S&P 500 futures were little changed around 7,734. Dow Jones futures rose 0.28% to 52,326.
In premarket trading, chip stocks came under pressure, with Micron Technology falling 2.2%, Intel declining 1.2% and Qualcomm slipping 0.35%.
The mixed moves followed a recovery on Monday, when the S&P 500 gained 0.4% and the Nasdaq Composite advanced more than 1%. Nvidia rose 1.4%, Tesla jumped 3.8% and Alphabet added about 1%, helping the technology-heavy market rebound from last week's sell-off.
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Here are three factors weighing on investor sentiment.
Crude Oil Rises As Houthi Attacks Raise Supply Concerns
Oil prices edged higher on Tuesday after Iran-backed Houthi forces escalated attacks against Saudi Arabia, reviving concerns about potential disruptions to energy supplies in the Middle East. Brent crude futures rose 0.14% to $109.70 per barrel, while US West Texas Intermediate crude futures for November delivery gained 0.25% to $103.92 per barrel.
The Houthis claimed on Monday to have targeted King Khalid International Airport again, along with Abha International Airport in southwestern Saudi Arabia, Saudi Aramco facilities in Yanbu on the Red Sea coast, the Shaybah oilfield and Saudi naval forces.
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The latest developments have added to concerns about the security of energy infrastructure and the risk of further supply disruptions in the region. Higher crude prices can feed into inflation, increase transportation and production costs, and complicate the outlook for interest rates.
However, prospects of additional Russian supplies entering the market have helped limit the rise in oil prices.
For equity investors, the concern is that sustained energy-price increases could put pressure on corporate margins and consumer spending, particularly if inflation remains elevated for longer.
AI Spending Concerns Continue To Weigh On Technology Stocks
Concerns about the scale of borrowing required to fund artificial intelligence infrastructure have remained a source of volatility for technology stocks. Last week's sell-off spread beyond individual AI-linked companies as investors questioned whether the enormous investments in data centres, computing infrastructure and related technologies would generate adequate returns.
The market's recovery on Monday offered some relief. Nvidia advanced 1.4%, Tesla gained 3.8% and Alphabet rose about 1%, while the Nasdaq Composite climbed more than 1%.
However, Tuesday's weakness in chip stocks, including Micron, Intel and Qualcomm, indicated that sentiment remained fragile.
Investors are increasingly focused on the relationship between AI-related capital expenditure, financing costs and future earnings growth. Companies that borrow heavily to expand their infrastructure could face greater pressure if revenue growth fails to keep pace with investment or if interest rates remain elevated.
Investors Brace For A Busy Week Of Corporate Earnings
Investors are also preparing for a heavy schedule of corporate results, with around 70 S&P 500 companies expected to report earnings this week. United Airlines is scheduled to announce its results after Tuesday's closing bell, while General Motors is due to report before the market opens.
The results will offer fresh insight into the health of corporate America, including how companies are managing costs, demand and the impact of higher energy prices. Investors will also be watching management commentary for indications of how businesses are approaching investment plans and whether higher operating expenses are affecting profitability.
Beyond earnings, Tuesday's economic calendar includes housing starts and pending home sales data. The figures could provide further clues about the condition of the US housing market and the broader economy.
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