US stock futures slipped on Thursday as escalating concern about the Mideast conflict pushed oil higher and revived inflation fears, with US midterm elections less than two weeks away. Investors were also parsing the latest batch of tech earnings to gauge the prospects of the artificial-intelligence trade.
Nasdaq 100 futures slid 1.6% as of 8:35 a.m. in New York, while S&P 500 futures dropped 0.9%. West Texas Intermediate crude advanced 2.3% to $99.37 a barrel, and yields on 10-year Treasuries retreated to 5.04%. The US ordered some diplomats and their families out of Saudi Arabia over the threat from Houthi militants, after at least four people were killed in attacks on an Aramco oil site and an eastern airport on Wednesday.
Meta Platforms Inc. slid 2.9% ahead of the bell, even after reporting better-than-expected results and boosting its capital spending outlook. Tesla Inc. shares shed 3.7% after the electric-car maker cut its spending plans, while elevated operating expenses underscored the cost of its AI, robotics and autonomy push. Chipmakers also fell after Lam Research Corp.'s weaker-than-expected guidance weighed on the chip-equipment complex, overshadowing a beat from Texas Instruments Inc.
Apollo Chief Economist Torsten Slok warned that startups buying the most compute are funding it with venture capital rather than organic earnings, and that a slow AI payoff could pressure VC returns and, in turn, demand for compute. Meanwhile, French bond stress deepened as investors dumped riskier assets worldwide. Peter Boockvar of The Boock Report noted that German bunds and US Treasuries were benefiting as the flight-to-safety trade, and he expects US yields have seen a temporary peak in the short term.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing