Gotrade News - US stock futures moved lower ahead of a crucial week featuring a Federal Reserve decision and a series of Big Tech earnings reports. Renewed concerns over AI spending also pressured sentiment toward megacap technology stocks. According to Investing.com, S&P 500 futures fell 0.3% to 7,424.50, Nasdaq 100 futures dropped 1% to 27,902.25, while Dow futures were roughly flat at 52,396.0. The pullback showed that traders were becoming more cautious as they waited for signals from both the Fed and the market's largest companies.
Key Takeaways
- Nasdaq 100 futures fell 1% as AI-spending concerns pressured megacap tech.
- The FOMC announces its rate decision on Wednesday, with rates expected to remain unchanged.
- Microsoft, Meta, Apple, and Amazon report earnings later this week.
- Alphabet's strong Q2 results set the early benchmark for the megacap earnings wave.
The risk-off move started in the semiconductor sector. Investing.com reported that Nvidia (NVDA) fell around 5% after announcing AI financing commitments worth more than $750 billion. The figure raised fresh questions about how much capital companies will need to keep funding the AI buildout.
Strong gains in China's semiconductor sector added to the pressure. Memory-chip maker CXMT made a solid market debut, increasing concerns about competition for established global chip companies.
The selloff was even sharper in Asia. According to Investing.com, South Korea's KOSPI fell more than 10%, while Japan's Nikkei dropped nearly 4%. Samsung and SK Hynix both closed around 14% lower. The broad decline showed how quickly worries about AI spending can spread across the global chip supply chain.
Fed Expected to Hold as September Hike Odds Reach 80%
The Federal Reserve now takes center stage. The FOMC will announce its rate decision on Wednesday, and markets broadly expect policymakers to leave rates unchanged.
According to Investing.com, citing the CME FedWatch tool, traders see a 38% chance of a rate hike at this meeting. The probability of an increase by September, however, has reached around 80%.
| Metric | Reading |
| Hike odds this week | 38% |
| September hike odds | 80% |
| Expected outcome Wednesday | No change |
Because the decision itself is widely expected, investors may focus more on Fed Chair Kevin Warsh's comments. Any signal about the timing of the next rate move could have a bigger impact on the market.
The earnings calendar also adds to the tension. Microsoft (MSFT), Meta Platforms, Apple, and Amazon are all scheduled to report later this week. Their results should provide a clearer picture of demand, AI investment, and capital spending across the megacap tech sector.
Alphabet and Tesla reported last week, and both brought attention back to rising AI costs. That theme is likely to remain a major focus in the reports still to come.
Alphabet Cloud Revenue Jumps 82% in Q2
Alphabet's latest quarter has set the benchmark for this week's earnings. According to The Motley Fool, Alphabet (GOOGL) reported Q2 revenue of $119.8 billion, up 24% from a year earlier. It was also the company's 12th straight quarter of double-digit revenue growth.
Google Search and Other revenue rose 17% to $63.3 billion, while YouTube advertising revenue increased 13% to $11.1 billion.
Google Cloud delivered the strongest growth. Revenue surged 82% year over year to $24.8 billion, representing roughly one-fifth of Alphabet's total revenue. Cloud operating income more than tripled to $8.8 billion, with an operating margin of 35.6%.
Alphabet's total operating income increased 30%, while its overall operating margin rose two percentage points to 34%. The company has a market capitalization of around $3.9 trillion to $4.0 trillion and trades at a forward price-to-earnings ratio of about 24 times.
At the same time, Alphabet raised its 2026 capital expenditure guidance to between $195 billion and $205 billion, mainly to fund AI infrastructure.
Investors still reacted positively. According to The Motley Fool, GOOGL shares rose 2.13% on July 25, suggesting that strong growth helped offset concerns about higher spending. The Motley Fool also noted that a $10,000 investment in Alphabet ten years ago would now be worth around $84,000, equal to an annual return of roughly 24%.
The market is now balancing two key factors. The Fed's rate outlook will influence the cost of funding the AI buildout, while upcoming earnings will show whether that spending is translating into stronger revenue and profit growth.
With Microsoft, Meta, Apple, and Amazon still set to report, this week could determine whether concerns over AI spending become a bigger warning for tech stocks or remain a temporary source of volatility.
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