Dow futures rise to fresh record territory while Nasdaq futures dip as investors weigh a heavy slate of earnings, AI spending concerns, and hopes for a Strait of Hormuz breakthrough.
US stock futures were largely flat on Thursday morning as traders sifted through a dense batch of corporate earnings, growing optimism around a possible resolution to the Strait of Hormuz standoff, and fresh labor market data. The Dow Jones Industrial Average, still riding its record-breaking win streak, pointed modestly higher, while Nasdaq futures slipped as AI-related concerns continued to weigh on tech sentiment.
Where Futures Stood
Dow futures rose about 0.2%, building on the index’s recent run to record highs. S&P 500 futures ticked up roughly 0.1%, while Nasdaq-100 futures dipped around 0.1%, reflecting the split mood between blue-chip strength and lingering caution in tech.
Beyond the major indexes, other market gauges pointed to a mixed but calm backdrop: the Russell 2000 edged up slightly, the VIX volatility index rose modestly, gold climbed near $4,326 an ounce, Bitcoin traded above $64,500, and crude oil moved higher amid ongoing geopolitical developments in the Middle East.
AI Spending Concerns Keep Weighing on Tech
Much of the caution around Nasdaq futures traces back to a theme that’s dominated this earnings season: how much companies are spending on AI infrastructure, and whether that spending is translating into real returns. Investors remain laser-focused on this question, and it’s producing sharp, sometimes punishing reactions to earnings — even from companies that technically beat expectations.
AMD, Sandisk, and Western Digital have all felt this pressure recently, with shares reacting negatively despite solid underlying results. SpaceX has faced an especially rough stretch, with its stock hovering near all-time lows. The company faces another test Thursday as a lockup period expires, potentially freeing up a large volume of shares — reportedly around $101 billion worth — for trading, which could add further pressure on the stock.
A Look Back at Wednesday’s Session
Wednesday’s trading captured this same tension well. The Dow climbed to a fresh record close, gaining 263 points, or 0.49%, to finish at 54,349 — marking its fifth consecutive positive session, powered largely by strong earnings and a lift in Nvidia shares after favorable comments from SpaceX regarding future AI chip purchases.
The S&P 500 and Nasdaq told a different story. Both touched new highs earlier in the day before losing steam and closing lower, dragged down by weakness in tech names. The S&P 500 slipped about 0.17% to 7,723.55, snapping a four-day winning streak, while the Nasdaq Composite fell 0.83% to 26,363.44.
Individual stock moves were notable throughout the session. Eli Lilly jumped roughly 9% after beating revenue expectations and raising its full-year guidance, while Arista Networks climbed about 7% on stronger-than-expected revenue. On the losing side, Alphabet dropped more than 4%, and SpaceX tumbled again — down over 13% — as concerns about surging AI capital expenditures overshadowed an otherwise strong revenue report. AMD also declined despite reporting datacenter revenue that more than doubled year-over-year.
Geopolitical and Economic Backdrop
Oil prices have been an active storyline this week, moving in response to developments around the Strait of Hormuz. Reports suggesting a potential US-Iran breakthrough helped fuel some of Wednesday’s early rally, though prices later firmed up again following reports of renewed maritime attacks in the Red Sea and Gulf of Aden. West Texas Intermediate crude was trading near $76 a barrel, while Brent crude hovered around $80.
On the economic data front, investors are also digesting fresh labor market figures, with ADP jobs growth coming in below expectations earlier in the week. Attention now turns to Friday’s nonfarm payrolls report, along with hourly earnings and unemployment data, for a clearer read on the health of the labor market.
What’s Still Ahead This Week
Thursday’s earnings docket includes results from ConocoPhillips, Cloudflare, and Airbnb, adding to an already packed reporting season. With markets sitting near record territory but showing clear divergence between blue-chip strength and tech-sector caution, investors will be watching closely to see whether upcoming earnings and Friday’s jobs report can either confirm the rally or introduce new volatility.
Frequently Asked Questions
Q: Why are Nasdaq futures falling while Dow futures rise? The split reflects investor caution around heavy AI infrastructure spending among tech and AI-linked companies, even as blue-chip stocks continue benefiting from strong earnings in sectors like healthcare and industrials.
Q: Why did SpaceX stock drop despite beating earnings expectations? Investors reacted more to a steep increase in SpaceX’s AI-related capital expenditures than to its revenue beat. The stock faces additional pressure this week as a lockup period expires, allowing a large volume of shares to potentially enter the market.
Q: What is driving oil prices this week? Oil prices have moved on reports tied to a possible Strait of Hormuz resolution between the US and Iran, along with reports of renewed maritime attacks in the Red Sea and Gulf of Aden involving Houthi forces.
Q: Which stocks performed best in Wednesday’s session? Eli Lilly and Arista Networks were among the top gainers, rising on strong earnings and revenue beats, while Alphabet and SpaceX were among the session’s biggest decliners.
Q: What economic data are investors watching next? Markets are focused on Friday’s nonfarm payrolls report, along with hourly earnings and the unemployment rate, following a weaker-than-expected ADP jobs report earlier in the week.
