U.S. equity futures showed little directional conviction on Thursday as traders absorbed a dense stream of market drivers, including a wave of quarterly reports from the largest technology companies, a renewed jump in oil prices, and a high-stakes Federal Reserve interest rate decision. The rapid sequence of events is expected to continue, with further corporate earnings and central bank meetings pending.
Mixed futures
By 03:35 ET (07:35 GMT) on Thursday, futures tied to the main U.S. indexes were near the flatline after a week of heavy news flow. The Dow futures contract had dropped by 275 points, or 0.6%. S&P 500 futures were down 6 points, or 0.1%, while Nasdaq 100 futures had climbed 30 points, or 0.1%.
Those moves followed a mixed session on the cash market the day before, where the major averages displayed varying performance. Market participants balanced broadly solid corporate results against the implications of a consequential Fed decision.
Technology earnings and AI spending
After the close of regular trading, several mega-cap technology firms released quarterly results that offered additional insight into enterprise spending on artificial intelligence infrastructure.
Alphabet delivered what analysts at Deutsche Bank called a "decent set" of results, and its shares rose in extended-hours trading in part because cloud revenue exceeded expectations. Amazon also moved higher after hours, helped by the largest increase in revenue at Amazon Web Services since 2022.
Microsoft reported cloud revenue that roughly met expectations and issued guidance pointing to an acceleration in the second half of the year. Meanwhile, Meta slid in after-hours trading after the Instagram-owner raised its planned capital expenditures for 2026 by $20 billion, setting a new range of between $125 billion to $145 billion.
Collectively, the four companies disclosed record capital spending of $130.65 billion in the first quarter, focused mainly on building data centers to support AI. That total represents a 71% increase compared with spending in the same quarter a year earlier.
Oil prices surge on Iran-related report
While markets sifted through corporate results, a news report triggered a fresh surge in crude prices, pushing Brent to its highest levels since the start of the Iran war in late February. Axios reported that President Donald Trump will receive a briefing on carrying out another potential military strike on Iran later in the day, an action described as intended to coax Tehran back to negotiations after talks stalled over Iran's nuclear program.
On social media, President Trump posted: "Iran can’t get their act together. They don’t know how to sign a nonnuclear deal. They better get smart soon!"
Analysts at ING wrote that these developments have eroded recent hopes that the White House was beginning to wind down the war despite the ongoing impasse with Iran. "The oil market has moved from over-optimism to the reality of the supply disruption we are seeing in the Persian Gulf," the ING analysts said, linking the geopolitical risk directly to the rise in crude prices.
Fed stays on hold amid internal divisions; Powell to remain on board
The Federal Reserve left its policy rate unchanged at a range of 3.5% to 3.75%, as widely expected, but the decision exposed sharp internal divisions. The central bank described the decision as its most contentious since the early 1990s, with four of the 12 voting members of the Federal Open Market Committee dissenting.
In addition to keeping interest rates steady, the Fed did not alter the language of its policy statement, which currently signals that the next move is more likely to be down rather than up.
In a move that departs from past practice, Fed Chair Jerome Powell announced he will remain on the Federal Reserve's board after his chairmanship ends in May. That decision could affect the transition to Kevin Warsh, President Trump's nominee to succeed Powell as chair.
Powell also expressed concern about legal pressures on the Federal Reserve. He said he was bothered by "the series of legal attacks on the Fed," and warned these efforts could force monetary policy decisions to consider political factors. The Justice Department recently suspended a criminal investigation into Powell's handling of renovations to the Fed's headquarters. Powell said that the legal battle left him with "no choice" but to stay on the board.
ECB and BOE decisions in focus
With elevated oil prices and the threat of renewed strikes in the Middle East weighing on markets, investors were also preparing for policy announcements from the European Central Bank and the Bank of England.
The ECB is expected to keep its deposit rate steady at 2%. Deutsche Bank analysts noted that because Europe is exposed to rising crude prices, markets are pricing in a rate increase at the ECB's next meeting in June. The analysts framed Thursday's decision as a test of whether the ECB will validate that market view.
Policymakers at the Bank of England are also expected to hold rates at 3.75%, while warning of the dual risks of slowing growth and rising inflation in their outlook.
Outlook
Market participants face a dense calendar that includes more corporate earnings and upcoming central bank decisions. In the near term, the interaction between large-scale technology capital spending, geopolitical developments affecting oil supply, and central bank policy choices will shape risk pricing and sector performance.
Investors and analysts will continue to monitor how record data center investment by major tech firms feeds into demand for cloud services and related industries, how oil price volatility evolves in response to potential military developments, and whether central banks adjust their policy stances in light of those pressures.