US stock index futures fell Wednesday, pressured chiefly by losses in technology stocks after underwhelming earnings from Google-owner Alphabet as well as trade tensions between the US and China.
At 06:00 ET (11:00 GMT), Dow Jones Futures fell 80 points, or 0.2%, S&P 500 Futures dropped 30 points, or 0.5%, and Nasdaq 100 Futures slipped 195 points, or 0.9%.
Wall Street indexes ended Tuesday’s session higher, buoyed in part by hopes that US President Donald Trump's decision to delay tariffs on Mexico and Canada signaled possible flexibility in his negotiating stance with China.
The S&P 500 rose 0.7%, the NASDAQ Composite gained 1.4% and the Dow Jones Industrial Average advanced 0.3%.
Alphabet slides as Q4 earnings underwhelm
However, this positive tone hasn't last long, with sentiment hit after Alphabet’s (NASDAQ:GOOGL) fourth-quarter revenue missed expectations, especially on disappointing earnings from its cloud division, which is closely tied to AI.
The search giant said it plans to spend $75 billion on building out its artificial intelligence capabilities this year, well above the $58 billion in capital expenditures pencilled in by analysts.
Wall Street’s AI spending has come under heightened scrutiny in recent weeks, especially with the release of China’s DeepSeek R1 AI model, which appeared to operate on a substantially smaller budget. This triggered a massive rout in tech valuations last week, one that Wall Street is still struggling to recover from, with Alphabet trading over 7% lower premarket.
Apple (NASDAQ:AAPL) stock also fell premarket after Bloomberg reported that Chinese regulators are considering whether to open a formal probe into the iPhone giant’s App Store fees and policies.
Beijing could move against Apple
Beijing's potential move against the iPhone gaint could be seen as past a brewing trade war with China, after Trump’s 10% tariffs against the country took effect. Beijing retaliated with its own import tariffs and export controls, and also launched an antitrust investigation into Google.
Trump signaled that he was in no hurry to negotiate with Chinese President Xi Jinping, with the tariffs now set to remain in place for the foreseeable future.
Analysts warned that increased trade tariffs - which will be borne by US importers, could underpin inflation and pressure growth.
More earnings due
There are more major earnings are on tap this week, with the likes of Uber (NYSE:UBER), Walt Disney (NYSE:DIS), Qualcomm (NASDAQ:QCOM) and MicroStrategy (NASDAQ:MSTR) due on Wednesday.
Elsewhere, Snap (NYSE:SNAP) shares jrose premarket after the Snapchat-owner posted better-than-expected quarterly earnings and issued upbeat guidance on the back of stabilizing digital ad spending.
Advanced Micro Devices (NASDAQ:AMD) shares slumped premarket after its fourth-quarter data center revenue came in at $3.9 billion, below consensus expectations of $4.15 billion.
Chipotle Mexican Grill (NYSE:CMG) stock fell 6% premarket after the burrito chain reported fourth-quarter same-store sales that rose less than expected.
ADP employment data scheduled
On the economic front, investors are looking forward to the latest ADP private payrolls, ahead of Friday's widely-watched nonfarm payrolls report.
Data released on Tuesday showed that US job openings in December decreased by more than anticipated, although hiring remained resilient, in a possible sign of a slowly cooling labor market.
Crude slips on US inventories build
Oil prices slipped lower Wednesday after higher-than-expected US crude inventories data raised concerns over consumption levels in the world’s largest consumer.
By 06:00 ET, the US crude futures (WTI) slipped 0.8% to $72.11 a barrel, while the Brent contract fell 0.8% to $75.61 a barrel.
Crude stocks rose by just over 5 million barrels in the week ended Jan. 31, according to data from the American Petroleum Institute, while gasoline inventories rose by a similar amount.
Official US government oil inventory data from the Energy Information Administration are due to be released later in the session.
(Ambar Warrick contributed to this article.)
