Nasdaq-100 fund indicated 1.7% lower as AI spending worries return
Oil is higher after further Houthi attacks in Saudi Arabia, and Asia closed sharply lower.
Key takeaways
At 7:12 a.m. ET, the bid on the Invesco QQQ Trust, Series 1, QQQ, was $713.15, 1.7% under Wednesday's close of $725.20. Tesla had cut its spending plans, and Meta Platforms had approved new shares to help fund artificial intelligence.
At the same time, the bid on State Street's SPDR S&P 500 ETF, SPY, was $765.31, 1% under Wednesday's close of $773.09. Wednesday's session had gone the other way. The Nasdaq Composite rose 1.1%, and the S&P 500 rose 0.6%.
QQQ fell further from its October peak than SPY did
- QQQ · 102.25
- SPY · 101.04
Reuters reported that results from the two companies did little to allay concerns over spending on artificial intelligence, and that a rebound in oil added to the pressure.
Tesla's spending cut raised questions about its AI plans
Tesla closed Wednesday up 3.4%, at $386.47. That close came before the results. CNBC reported that Tesla beat estimates after the bell, with adjusted earnings of 48 cents a share against a forecast of 43 cents.
By 7:12 a.m. ET the bid was $373, 3.5% under that close. Reuters said the shares fell after Tesla cut its capital-spending forecast, and that the cut raised questions about the pace of its artificial intelligence and robotics expansion.
On the earnings call, Chief Financial Officer Vaibhav Taneja said Tesla was revising 2026 capital expenditure to about $20 billion, from more than $25 billion. He said the company was managing its capital deployment efficiently and planned to fund the spending mainly from operating cash flow.
Meta's new shares put the cost of the buildout back in view
Meta said revenue rose 26%, to $64.6 billion. CNBC reported that sales beat an estimate of $63.37 billion, and that the shares rose about 2.5% in extended trading Wednesday evening.
Meta said it expects 2026 capital expenditure of $135 billion to $145 billion, narrowed from $130 billion to $145 billion. Its board approved a new class of publicly listed, non-voting shares, to take effect in January 2027.
Reuters attributed the drop to that new class. It said the class was meant to help fund the AI buildout, and that the plan revived scrutiny of the capital the buildout still requires. At 7:12 a.m. ET the bid was $683.30, 2% under Wednesday's close of $697.52.
Further attacks in Saudi Arabia lifted oil
West Texas Intermediate crude was $98.85 a barrel at 7:12 a.m. ET, up 1.7% from Wednesday's settle of $97.15. Brent was $111.57, up 2.5% from $108.82. Reuters said further Houthi attacks in Saudi Arabia had lifted Brent near a five-month high, stoking fears of supply disruptions and a wider Middle East conflict.
State Department spokesperson Tommy Pigott said the department ordered non-emergency U.S. government employees and their family members to leave Saudi Arabia. Reuters reported that the order came as attacks in the kingdom killed at least one person and injured eight others at a civilian airport.
Gold futures were $4,090.60 at 7:02 a.m. ET, down 1.4% from Wednesday's settle of $4,150. Reuters said the rise in oil had stoked inflation concerns and reinforced expectations that interest rates could stay higher for longer, ahead of next week's Federal Reserve meeting.
CNBC reported at 5:31 a.m. ET that the 10-year Treasury yield was more than 7 basis points lower, at 5.07%.
In Asia, Japan's Nikkei 225 closed down 2.7%. South Korea's Kospi fell 3.5%, and Hong Kong's Hang Seng fell 3.0%. France's CAC 40 was down 1.3% at 7:12 a.m. ET. London's FTSE 100 was down 0.4% at 6:57 a.m.
Asia fell harder than Europe overnight
Initial jobless claims, due at 8:30 a.m. ET, are the next U.S. reading before the open. The consensus is 200,000, against 199,000 the week before.
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