US stock futures fell sharply on Thursday as Wall Street’s technology rebound faltered under renewed scrutiny of artificial intelligence spending and another surge in oil prices.
Nasdaq 100 futures were down over 500 points, or 1.93%, S&P 500 contracts lost 1.1% and Dow futures shed 0.69%.
The reversal followed Wednesday’s 1.1% Nasdaq gain, when strong AI infrastructure results briefly restored confidence.
Disappointing reactions to Tesla, IBM and Lam Research, Brent crude above $112 and a sell-off in Chinese stocks now threaten that recovery.
5 things to know before Wall Street opens
1. Tesla and Meta expose the cost of AI investment
Tesla fell 5.3% premarket after cutting its 2026 capital spending forecast from $25 billion to $20 billion. Free cash flow reached $1.5 billion, prompting questions about the pace of its AI projects.
Morningstar analyst Seth Goldstein interpreted the result as evidence of a more capital-efficient approach.
Meta’s revenue rose 26% to $64.6 billion, but it raised the lower end of its annual spending forecast to $135 billion and approved non-voting shares to fund expansion. A separate $25 billion New Mexico privacy judgment added legal uncertainty.
2. IBM and Lam Research show why earnings beats are insufficient
IBM fell 5.7% premarket despite strong results and improved cash-flow guidance.
Lam Research dropped 8.5%, even after its $8.22 billion revenue and $2.20 adjusted earnings per share beat expectations.
Nvidia, Intel, SpaceX and Super Micro Computer also retreated as Wednesday’s rally reversed.
3. Brent breaks above $112 as Saudi attacks revive supply fears
Brent jumped more than 3% to around $112 a barrel after deadly attacks in Saudi Arabia revived fears of disrupted Gulf shipments.
At least three people died in incidents involving an airport and oil facilities, while Washington ordered some diplomatic personnel to leave the region.
MUFG analysts said repeated attacks on energy infrastructure were keeping geopolitical risks elevated even without a confirmed major production shutdown.
4. Chinese shares approach a technical bear market
China’s CSI 300 fell as much as 1.6%, taking its retreat from a June high towards the conventional 20% bear-market threshold.
Hong Kong’s Hang Seng lost 2.9%, and the Hang Seng Tech index plunged 4.6%. Alibaba fell almost 6% and Tencent declined 3.4%.
Disappointing company results and fading hopes of substantial stimulus have hurt confidence, despite China’s 4.5% third-quarter growth.
5. Jobless claims test the economy beyond technology
Initial US jobless claims are due at 8:30 am ET, with economists expecting 200,000 applications, up from 199,000 previously.
The Conference Board’s leading index follows at 10 am, with the Kansas City Fed manufacturing survey later in the morning.
Earnings from Procter & Gamble, Honeywell, Union Pacific, Blackstone and American Airlines will offer a broader view of household spending, industrial demand and financing conditions.
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