US Stock Market Indices Futures Down, Alphabet’s Earnings Fall Short

Futures for US stock market indices fell on Wednesday, mainly pressured by losses in technology stocks following disappointing results from Alphabet, which owns Google, as well as trade tensions between the United States and China.

Dow Jones futures fell by around 80 points, 0.2%, S&P 500 futures decreased by around 30 points, 0.5%, and Nasdaq 100 futures fell by around 195 points, 0.9%.

Wall Street indexes ended Tuesday’s session higher, supported in part by hopes that US President Donald Trump’s decision to delay tariffs on both Mexico and Canada would signal likely flexibility in his negotiating stance with China.

The S&P 500 rose 0.7%, the Nasdaq Composite gained 1.4%, and the Dow Jones Industrial Average was up 0.3%.

Alphabet Plummets as Fourth-Quarter Earnings Disappoint

However, this positive tone did not last long, as confidence was hit after Alphabet’s (GOOGL) fourth-quarter revenue fell short of estimates, mainly due to disappointing profits from its cloud division, which is strongly linked to artificial intelligence.

The search giant said it plans to spend nearly $75 billion on developing its artificial intelligence capabilities this year, well above the $58 billion in capital expenditures estimated by analysts.

Wall Street’s AI spending has come under increased scrutiny in recent weeks, especially after the launch of China’s DeepSeek R1 AI model, which has shown competitive performance on a considerably smaller budget. This led to a massive drop in tech valuations the previous week, which Wall Street is still struggling to recover from, with Alphabet trading more than 7% lower ahead of the market open.

Apple (AAPL) shares also fell before the market opened after Bloomberg reported that Chinese regulators are considering a formal investigation into the iPhone giant’s App Store fees and policies.

China Could Take Action Against Apple

The potential move by Beijing against Apple could be seen as part of the ongoing trade war with China, following Trump’s 10% tariffs on the country. Beijing retaliated with its own import tariffs and export controls and also launched an antitrust investigation into Google.

Trump indicated that the US is in no hurry to negotiate with Chinese President Xi Jinping and that tariffs will remain in place for the foreseeable future.

Analysts noted that the increase in trade tariffs, which will be borne by US importers, could fuel inflation while also putting pressure on economic growth.

More Earnings in Sight

More major earnings reports are due this week, including those from Uber (UBER), Walt Disney (DIS), Qualcomm (QCOM), and MicroStrategy (MSTR), all scheduled for Wednesday.

Elsewhere, Snap (SNAP) shares rose before the market opened after the owner of Snapchat posted better-than-expected quarterly profits and provided an upbeat forecast, thanks to stabilizing digital advertising spending.

Advanced Micro Devices (AMD) shares fell premarket after its fourth-quarter data center revenues came in at $3.9 billion, below the consensus forecast of $4.15 billion.

Shares of Chipotle Mexican Grill (CMG) were down 6% in premarket trading after the burrito chain reported that same-store sales in the fourth quarter rose less than expected.

ADP Employment Data Due

From an economic standpoint, investors are eagerly awaiting the latest ADP private payrolls data ahead of Friday’s closely watched non-farm payrolls report.

Data released on Tuesday showed that job openings in the US fell more than expected in December, although hiring remained resilient, signaling a gradually cooling labor market.

Crude Oil Falls as US Inventories Rise

Oil prices fell on Wednesday after higher-than-expected US crude oil inventory data raised concerns about consumption levels in the world’s largest oil-consuming nation.

Crude oil reserves increased by just over 5 million barrels in the week ending January 31, according to data from the American Petroleum Institute, while gasoline inventories rose by a similar amount.

Official oil inventory data from the US government’s Energy Information Administration will be released at the end of the session.