February 4, 2026
Dow, S&P 500, and Nasdaq futures wobble ahead of Alphabet earnings as AI-driven disruption rattles tech and software stocks
US stock futures traded cautiously on Wednesday as Wall Street sought stability following a tech-led selloff, with investors bracing for Alphabet’s earnings report. Futures tied to the Dow Jones Industrial Average rose modestly by 0.2%, while S&P 500 contracts gained 0.1%, and Nasdaq 100 futures fell 0.3% as technology stocks remained under pressure.
The volatility comes amid renewed concerns over AI-driven disruption. A selloff in software shares on Tuesday, sparked by a new automation tool from Anthropic PBC, highlighted the fragility of tech valuations and spilled into broader markets, including financial services and asset managers. European stocks exposed to AI risk fell another 1.2%, while cyclical and economically sensitive sectors, such as chemicals and autos, saw gains.
“I don’t think the market has fully resolved whether this move was based on fear or fundamentals. What’s clear is a confidence break at the category level,” said Stephanie Niven, portfolio manager at Ninety One. “Before convictions can be rebuilt at the company level, we are seeing indiscriminate selling.”
Tech Earnings Pressure Nasdaq
Tech giants face scrutiny as investors question whether AI investments are translating into meaningful returns. Nvidia and Advanced Micro Devices were hit hard, with AMD’s shares tumbling 9% after a cautious sales forecast. Microsoft and Meta had mixed responses last week, reflecting divergent views on AI spending efficiency.
Alphabet’s earnings report is now a focal point. Investors want evidence that Google’s AI-driven projects will boost search and cloud monetization without ballooning costs. Analysts warn that even strong earnings will not reassure markets unless they demonstrate clear AI profitability.
Dow and S&P Show Relative Stability
While the Nasdaq remains fragile, the Dow and S&P 500 have found relative stability. Rotation into value-oriented and defensive sectors has supported broader indices. Pharma stocks showed mixed results: Eli Lilly surged on strong demand for its weight-loss drug, while Novo Nordisk shocked investors with a steep sales decline forecast.
Other corporate developments added to the market story. Texas Instruments agreed to acquire Silicon Laboratories for $7.5 billion, while Uber offered a weak profit outlook alongside investments in autonomous vehicles. UBS posted better-than-expected quarterly profits and announced a $3 billion buyback program.
Gold Surpasses $5,000 as Safe-Haven Demand Surges
Precious metals rebounded sharply as investors sought safety. Gold futures rose above $5,000 an ounce, fueled by equity market volatility and geopolitical uncertainty. West Texas Intermediate crude climbed 0.3% to $63.39 per barrel, and the Bloomberg Dollar Spot Index edged up 0.1%.
Crypto and Bonds
Bitcoin hovered near $76,000, while Ether fell 2.5% amid broader tech sector turbulence. Treasury yields remained steady, with the 10-year US Treasury at 4.27%, reflecting caution among bond investors as employment and economic data await the ADP payroll report.
Strategic Takeaways
Market analysts emphasize that AI disruption is creating both risk and opportunity. Legal-tech firms experienced sharp losses after Anthropic launched a new automation tool, but broader AI supply chains saw gains. Investors are increasingly selective, focusing on companies that can demonstrate measurable returns from innovation.
“The biggest risk for tonight’s Alphabet earnings is the decoupling between Google’s long-term AI leadership and short-term monetization trends,” said Jacques-Aurélien Marcireau, co-head of equities at Edmond de Rothschild Asset Management. “Markets will judge whether AI investment translates into tangible results.”
What’s Next
Investors will closely monitor Alphabet’s earnings and guidance. The broader tech sector remains sensitive to AI developments and automation trends, while rotation into cyclical and value sectors may continue. With earnings season underway, market participants are seeking clarity, discipline, and execution rather than long-term narratives alone.
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