Dow futures plunge 154 points: 5 things to know before Wall Street opens

US stock futures fell on Thursday as investors gave a cool reception to the first major technology results of the season and oil surged towards $100 a barrel.

Alphabet’s strongest-ever cloud growth was overshadowed by a larger AI spending plan, while Tesla’s first negative free cash flow in more than two years sharpened questions about the cost of its robotics pivot.

Futures tied to the Dow Jones Industrial Average fell 154 points, or 0.3%, while S&P 500 and Nasdaq 100 futures also declined 0.3%.

Wall Street is now confronting higher valuation hurdles, tighter financial conditions and a less forgiving earnings season.

5 things to know before Wall Street opens

1. Alphabet’s capex surge unsettles investors

Alphabet shares fell before the bell even after revenue climbed 24% to $119.8 billion and Google Cloud sales jumped 82% to $24.8 billion.

The concern was its decision to raise 2026 capital-expenditure guidance to between $195 billion and $205 billion, increasing the midpoint by $15 billion.

Investors now want clearer evidence that data-centre spending can translate into sustained free cash flow and stronger returns.

2. Tesla’s physical-AI pivot burns cash

Tesla also retreated after reporting negative free cash flow for the first time in more than two years.

Rising expenditure on robotaxis, humanoid robots and AI infrastructure is widening the gap between technological ambition and near-term profitability.

eToro strategist Lale Akoner viewed Alphabet as further along in connecting AI investment with commercial growth, while Tesla still needs to prove its projects can deliver dependable returns.

3. Brent’s surge revives inflation anxiety

Brent crude moved above $98 a barrel after Houthi forces said they attacked Saudi tankers in the Red Sea, adding a second major threat to regional energy flows alongside disruption around the Strait of Hormuz.

The advance pushed Treasury yields towards multi-month highs and revived concern that higher fuel, freight and insurance costs could slow disinflation.

4. Fed expectations turn more sensitive to energy

CME FedWatch continued to show a hold as the more likely outcome at the Federal Reserve’s July 28-29 meeting.

However, traders have increased expectations for tightening later in the year as the oil shock raises the risk of renewed price pressure.

Higher yields are particularly uncomfortable for expensive technology stocks whose valuations depend heavily on future earnings.

5. ServiceNow stands out as other results disappoint

ServiceNow rose after subscription revenue increased 24.5% to $3.88 billion and the company lifted its full-year forecast.

Its AI business also crossed $1 billion in annual contract value.

Texas Instruments fell about 5% despite beating expectations and issuing stronger revenue guidance, while Molina Healthcare declined after its improved profit forecast was overshadowed by weaker membership and revenue concerns.

The contrasting reactions show what investors now demand: visible AI monetisation, durable cash generation and guidance strong enough to justify already elevated valuations.