Wall Street looked set to open lower on Thursday, as Nasdaq futures fell sharply, with investors unconvinced by earnings from Tesla and Meta Platforms amid growing concerns over the cost of the artificial intelligence (AI) race.
Nasdaq 100 futures for December delivery on CME were down 463.25 points, or 1.54%, at 29,543.75, according to real-time market data at 4:17 p.m. IST. The decline followed a strong session on Wednesday, when the technology-heavy Nasdaq rallied on optimism surrounding AI-linked stocks.
The mood shifted as investors reassessed the spending required to sustain the AI boom. Tesla and Meta both reported results that exceeded expectations on key measures, but their outlooks and funding requirements renewed questions about whether the massive investments in AI will deliver adequate returns.
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Tesla shares were quoted at $386.47, up $12.76, or 3.41%, in the previous session. However, the stock fell to $372.20 in premarket trading, down $14.27, or 3.69%, from its previous close.
The electric-vehicle maker's decision to lower its annual capital expenditure forecast added to uncertainty over the pace of its AI and robotics expansion, despite stronger-than-expected quarterly results.
Meta Platforms shares also came under pressure. The stock closed at $697.52, up $3.27, or 0.47%, before slipping to $689.48 in premarket trading, a decline of $8.04, or 1.15%.
The social media company has introduced new non-voting shares to help finance its expensive AI ambitions, bringing investor attention back to the capital required to compete in the sector.
Higher crude oil prices further weighed on sentiment as renewed geopolitical concerns in the Middle East raised the risk of supply disruptions.
Brent crude rose more than 2% to around $112 per barrel, while US West Texas Intermediate (WTI) crude advanced towards $99.25. The New York Times reported, citing sources, that the US and Israel had plans for renewed strikes against Iran following next month's US midterm elections.
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The developments prompted investors to seek safety in government bonds. The US 10-year Treasury yield fell by around seven basis points to 5.069%, while the two-year yield declined to 4.761%.
The weakness extended beyond US technology stocks. In Europe, the Stoxx 600 fell around 1%, while France's CAC 40 declined 1.34%. In Asia, Hong Kong's Hang Seng dropped more than 2%, South Korea's Kospi lost over 1%, and Japan's Nikkei 225 slipped 0.73%.
Investors will also track upcoming corporate earnings and weekly US jobless claims for fresh signals on economic momentum and the outlook for equities.
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