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Dow Jones futures edged lower after hours, along with S&P 500 futures and Nasdaq futures. Google-parent Alphabet and Tesla fell on earnings, but heavy capital spending buoyed many AI stocks overnight.
The stock market was mixed but generally lower Wednesday, with oil prices and Treasury yields continuing to power higher. Small caps led the decline but the S&P 500 held key support.
Ahead of Google-parent AlphabetGOOGL, chips and AI stocks were mixed amid positive news from Super Micro ComputerSMCI, OpenAI and Advanced Micro DevicesAMD.
But software had a rough session. Biotechs retreated, though LiquidiaLQDA made a bullish move.
Space Exploration TechnologiesSPCX, or SpaceX, tumbled to a fresh low. SpaceX and TeslaTSLA are collaborating on the Terafab chip project amid rumors of a future merger between Elon Musk's companies.
Dow Jones Futures Today
Dow Jones futures lost a fraction. S&P 500 futures dipped 0.2%. Nasdaq-100 futures fell 0.3%. Google stock is a Dow Jones, S&P 500 and Nasdaq-100 member, while Tesla is a key S&P 500 and Nasdaq holding.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
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Google Earnings
Google earnings and revenue beat views, thanks to accelerating Google Cloud growth, as well as big investments in SpaceX and Anthropic. Capital spending only slightly exceeded Q2 forecasts.
However, Google raised planned 2026 capital expenditures to $195 billion-$205 billion from $180 billion-$190 billion and reiterated that it expects "our capex to increase significantly in 2027."
That's hugely important for the massive AI ecosystem, especially with the stocks struggling on spending concerns.
MicrosoftMSFT, Amazon.comAMZN and Meta PlatformsMETA will report next week, offering their own capex guidance.
Google stock fell modestly in overnight action on the heavy capex plans. Shares sank 1.5% to 342.09 in Wednesday's session, falling further from the 50-day line.
Other hyperscalers edged lower late, but memory plays and other AI hardware rose.
Tesla Earnings
Tesla earnings jumped, but fell well short of views despite strong Q2 EV deliveries.
Capital spending spiked, but less than expected. So Tesla burned cash for the first time in years, but the drop was less than expected.
Elon Musk, on the conference call, once again preached caution on the robotaxi expansion and Optimus efforts, while pledging "massive" cp ex.
Tesla stock tumbled in extended trade. Shares fell 1.3% to 374.01 in Wednesday's session.
Sister-company SpaceX closed down 6.7% in Wednesday's session to 115.26, hitting a new low, continuing to fall further below the $135 IPO price. SPCX stock has nearly halved in value since its June 16 peak of 225.64.
SpaceX shares edged higher late Wednesday.
Other Earnings
CSXCSX, Texas InstrumentsTXN, ServiceNowNOW, IBMIBM, United RentalsURI and Knight-Swift TransportationKNX reported late Wednesday.
United Rentals stock spiked in extended trade, signaling a possible entry. CSX, ServiceNow and IBM rose, but the former is extended while the tech giants are beaten down.
Knight-Swift edged lower late, with the trucking firm not far from a buy point. Texas Instruments fell modestly despite beating views.
Stock Market Rally
The stock market rally fell heading into Google earnings.
The Dow Jones Industrial Average lost 0.01% in Wednesday's stock market trading, holding its 21-day line. The S&P 500 index dipped 0.1%, still above the 50-day line after retaking that key level on Tuesday. The Nasdaq composite gave up 0.6%. The small-cap Russell 2000 slumped 0.9%, below its 21-day line and close to its 50-day.
The Invesco S&P 500 Equal Weight ETFRSP lost a fraction, giving up morning gains but just holding its 21-day line.
Surging Super Micro orders and gross margins sent SMCI and AI server rivals such as Dell TechnologiesDELL soaring. AMD announced a big AI chip deal with Anthropic. OpenAI reportedly plans a big data center expansion, along with far-higher long-term spending. On the downside, GE VernovaGEV tumbled on mixed results and concerns that it might be expanding too much.
On the downside, software fell after PegaSystemsPEGA earnings followed IBM's warning that customers are shifting spending to AI hardware.
U.S. crude oil prices popped 2.95% to $86.83 a barrel, up 10% in just the last four sessions.
The 10-year Treasury yield rose three basis points to 4.66%, almost at late May's 18-month high. Yields have been rising with oil prices.
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Growth ETFs
Among growth ETFs, the CapForce IBD 50 ETFFFTY fell 1.5%. The iShares Expanded Tech-Software Sector ETFIGV tumbled 3.05%. The VanEck Vectors Semiconductor ETFSMH gained 0.5%. AMD stock is a big SMH holding with Texas Instruments also in the ETF.
ARK Innovation ETFARKK retreated 2.2% and ARK Genomics ETFARKG gave up 1.8%. Tesla stock is the No. 1 holding across ARK Invest's ETFs.
Best Growth Stocks To Buy And Watch
What To Do Now
The S&P 500 and Nasdaq, on different sides of the 50-day line, both remain rangebound. Market leadership is in flux, making new buys tricky. Geopolitics and a ramped up earnings season are major uncertainties.
The market reaction to Google in particular will be important. A bullish move in AI stocks and the broader market could give buying opportunities. But a broader sell-off is possible too.
It's mostly a time of watching, and working on watchlists. Have your exit strategies ready too.
By the end of next week, it may be "obvious" that right now was a time to be buying (or selling). But will you be ready to act?
Liquidia stock is on the IBD 50. AMD stock is on the IBD Big Cap 20.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
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