U.S. equity futures ticked down on Wednesday as markets prepared for a heavy slate of technology sector earnings that could clarify how corporate America is allocating capital toward artificial intelligence infrastructure. The session's tone reflected investor caution ahead of reports from high-profile names including Alphabet, Texas Instruments and Tesla.
Futures open lower
By 02:54 ET (06:54 GMT), futures tied to the main U.S. indexes showed modest losses: the Dow futures contract had declined by 97 points, or 0.2%, S&P 500 futures were down 21 points, or 0.3%, and Nasdaq 100 futures had fallen 224 points, or 0.8%.
These moves came after the principal U.S. averages advanced in the previous session, even as an Iran-related rise in oil prices shifted some expectations for Federal Reserve policy toward a more hawkish stance. The earlier session's gains were largely driven by momentum in technology stocks, with chipmakers attracting notable buying. The Philadelphia semiconductor index rose 5.21% in that session, marking its strongest single-day performance in the past month.
Alphabet's results in focus
Attention has shifted to corporate reports from several major technology companies, with Alphabet set to publish quarterly results after the U.S. market close. Market watchers expect these numbers to influence sentiment about the AI spending cycle. Alphabet is counted among the so-called AI "hyperscalers" that are committing substantial sums to expand data centers and specialized semiconductors to support AI workloads, and uncertainty about when those investments will produce returns has been a concern for some investors.
Strategists at BofA Securities have estimated that, in light of accelerating AI demand, rising memory chip prices and a recent fundraising round, Alphabet could lift its 2026 capital expenditure range by about 5% to a new band of $190 billion to $200 billion. An analyst cited by Reuters warned that any reduction in the outlook for AI-related spending could reverberate through markets.
Nonetheless, BofA strategists said they "see Alphabet well positioned to drive outsized growth [and] cloud margin upside given favorable AI positioning across models, silicon, consumer [and] enterprise distribution." Wall Street projections quoted by BofA Securities forecast Alphabet to report second-quarter revenue of $101.0 billion and earnings per share of $2.90.
Texas Instruments to provide chip demand clues
While Alphabet's release is likely to dominate headlines, investors will also parse quarterly results from Texas Instruments for signals about demand among companies that manufacture the chips used in AI systems. The semiconductor sector has been a principal beneficiary of increased spending tied to AI, and expectations for second-quarter results reflect that momentum.
Research from LSEG cited by Reuters indicates that S&P 500 companies that make chips and chip equipment are expected to record a 133% year-over-year jump in earnings for the second quarter. That group is projected to account for about 44% of the total earnings gains among S&P 500 firms in the quarter, compared with an expected 26% rise for S&P 500 companies overall.
For Texas Instruments specifically, the company has given guidance for second-quarter revenue in a range from $5.0 billion to $5.40 billion, and anticipated earnings per share between $1.77 and $2.05. Texas Instruments, which produces analog chips that often feed into larger semiconductor systems, is widely watched as a bellwether for broader chip demand. Its stock has climbed more than 64% year to date.
Tesla's results: cash burn expectations
Elon Musk's Tesla is also scheduled to report after the bell, and market participants are bracing for what may be the company's first quarterly cash burn in over two years. That outlook hinges on Musk's strategic pivot toward AI and robotics, and rising investment needs to develop physical AI products such as autonomous taxi fleets and humanoid robots.
Spending on AI infrastructure at Tesla is forecast to reach $25 billion this year, a level that is expected to exceed the quarterly cash generation from the firm's automotive and energy operations. Investors have been watching progress toward Musk's product deadlines closely; missed timelines have heightened concern about the trajectory of Tesla's strategic shift. Tesla's stock has slid by more than 13% so far in 2026.
Oil climbs on fresh U.S. strikes
Energy markets also captured investor attention as oil prices rose to nearly six-week highs amid escalating hostilities between the U.S. and Iran, and concerns that a naval blockade targeting Saudi Arabia could threaten Middle East energy exports.
As of 04:12 ET (08:12 GMT), Brent crude futures for September delivery had increased 3.4% to $94.13 per barrel, while U.S. West Texas Intermediate (WTI) crude for the same timeframe was up 3.7% at $87.42 per barrel. Both benchmarks were headed for their fourth straight day of gains and were trading near levels not seen since June 11. Over the past seven sessions, both contracts have risen in six.
The rise in oil followed reports that U.S. forces completed strikes on Iranian military targets for an 11th consecutive night early Wednesday. The strikes targeted missile and drone launch sites, command-and-control facilities, air defense systems and other military infrastructure. Washington appears to be intensifying operations against Tehran even as mediators seek to revive diplomatic talks. President Donald Trump gave a pessimistic assessment of such negotiations, saying the U.S. had "no interest in meeting" with Iran.
What to watch next
Investors will be watching the earnings from Alphabet, Texas Instruments and Tesla closely for evidence of how rapidly AI-related spending is translating into increased revenue and profit margins, and to gauge the sustainability of recent gains in the semiconductor sector. The trajectory of oil prices and developments in the Middle East will also be monitored for potential spillover effects on inflation expectations and central bank policy outlooks.
With major tech players set to report and geopolitical tensions continuing to influence commodity markets, the balance of corporate capital allocation decisions and global risk events will likely shape market sentiment in the near term.