US Pre-Market: Three Major Index Futures Slide, Alphabet, Tesla Tumble Post-Earnings, Oil Surges Over 4%

TradingKey - On Thursday Eastern Time, futures tracking the three major US stock indices fell collectively in premarket trading. Alphabet ( GOOGL) and Tesla ( TSLA )'s earnings reports triggered negative market reactions, reigniting concerns over artificial intelligence capital expenditures and returns on investment. Meanwhile, the escalating conflict between the US and Iran pushed international oil prices sharply higher, bringing energy inflation and the risk of Federal Reserve interest rate hikes back into the market focus.

As of press time, Dow futures fell 0.44%, S&P 500 futures slid 0.44%, and Nasdaq 100 futures dropped 0.58%.

Performance of the three major US stock index futures, Source: Investing

In commodities, international oil prices rose for the fifth consecutive trading session, with WTI ( USOIL) crude oil surging over 4% to around $90.6, while Brent crude ( UKOIL) rose over 3% to trade around $98.7. As the US and Iran continued to launch retaliatory strikes and Houthi rebels targeted tankers in the Red Sea, the market grew concerned over simultaneous shipping disruptions in the Strait of Hormuz and the Bab-el-Mandeb Strait. Gold ( XAUUSD) fell nearly 1%, pulling back to around $4,090. Rising oil prices reinforced expectations for inflation and interest rate hikes, driving the US Dollar Index up to around 101 and the 10-year US Treasury yield to about 4.67%, which pressured the non-yielding gold.

In cryptocurrencies, Bitcoin ( BTC) fluctuated around $65,400. The escalating tensions in the Middle East failed to significantly boost safe-haven demand for Bitcoin; instead, rising oil prices and Treasury yields weighed on highly volatile assets, as the market continues to view Bitcoin primarily as a risk asset.

Market Movers

Google parent Alphabet fell over 4% premarket. The company's second-quarter revenue reached $119.8 billion, up 24% year-over-year, with strong growth in cloud revenue, but the company raised its 2026 capital expenditure guidance to $195 billion to $205 billion, reigniting market concerns over the pressure AI infrastructure investment could place on cash flow and profit margins.

Tesla fell over 6% premarket. The company's second-quarter revenue reached $28.24 billion, but adjusted earnings per share missed market expectations. Due to increased investment in AI, Robotaxi, and robotics, quarterly capital expenditure rose to approximately $5.8 billion, and free cash flow dropped to negative $1.1 billion, turning negative for the first time in over two years.

ServiceNow ( NOW) rose over 7% premarket. The company's second-quarter subscription revenue reached $3.877 billion, up 24.5% year-over-year, and remaining performance obligations reached $29 billion, up 21% year-over-year; the company also raised its full-year subscription revenue guidance once again.

Chip stocks diverged in premarket trading. Micron Technology ( MU) rose about 1.8%, Intel ( INTC) rose about 0.8%; Nvidia ( NVDA) fell about 0.9%, Texas Instruments ( TXN) fell over 4%. Although Texas Instruments' quarterly results and revenue guidance beat expectations, investors remained focused on the company's capital expenditures and the demand outlook for analog chips.

Market News

Alphabet significantly raised its artificial intelligence capital expenditures. Alphabet increased its 2026 capital expenditure forecast to $195 billion to $205 billion, with second-quarter capital expenditures at approximately $45 billion. The company stated that the funds will be primarily used for data centers, servers, and AI infrastructure supporting Gemini and Google Cloud.

Risks are rising in the Middle East's two major energy transit corridors. The U.S. and Iran continued to launch attacks against each other, and Houthi militants targeted oil tankers in the Red Sea, raising market fears of simultaneous supply disruptions in the Strait of Hormuz and the Bab el-Mandeb Strait, which sent Brent crude prices to their highest level since early June.

IBM lowered its full-year revenue growth forecast. IBM ( IBM) expects 2026 revenue growth on a constant-currency basis to be 4% to 5%, below its previous expectation of over 5%. Second-quarter Infrastructure revenue fell 7%, with IBM Z mainframe revenue declining 42%.

The European Central Bank is set to announce its interest rate decision. The market expects the ECB to keep interest rates unchanged, with the deposit facility rate currently at 2.25%. Investors will focus closely on the ECB's latest assessment of the Middle East conflict, rising energy prices, and the inflation outlook for the eurozone.

Key Data/Events Preview

At 8:15 a.m. ET on July 23, the European Central Bank will announce its interest rate decision; at 8:45 a.m., ECB President Lagarde will hold a press conference.

At 8:30 a.m. ET on July 23, the U.S. will release initial jobless claims for the week ending July 18, with market expectations at 211,000 and the previous figure at 208,000.

After the U.S. market close on July 23 ET, Intel (INTC) will release its second-quarter earnings report.