Alphabet shares tumbled 6% after the company projected its annual capital spending could reach $205 billion, fueling investor anxiety over the profitability of hyperscale AI investments. Tesla mirrored the downward trend, falling 13% after reporting negative free cash flow for the second quarter. The broader market reaction saw the Nasdaq slide 2% and the Dow Jones Industrial Average shed approximately 400 points as inflation concerns resurfaced.
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Brent Crude Hits $100 as Tech Rout Deepens on AI Spending Fears
Brent crude futures surged 6% to $100 a barrel following Houthi militant attacks on two Saudi tankers in the Red Sea. The geopolitical escalation, coupled with alarming capital expenditure forecasts from Big Tech, triggered a sharp selloff in equity markets and pushed 10-year Treasury yields to a year-long high.
Markets now pivot toward Intel, which is scheduled to release its earnings report after the closing bell. Investors are scrutinizing the chip giant for signals on whether the industry-wide push into artificial intelligence infrastructure is yielding sustainable returns or merely eroding balance sheets.
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