US stock futures fell on Thursday, October 29, as Alphabet's earnings miss renewed concerns over the rising cost of artificial intelligence investments.
According to premarket trading data at 7:02 a.m. ET, Nasdaq-100 futures dropped 0.93%, while S&P 500 futures declined 0.2%. Dow Jones Industrial Average futures slipped 0.09%. Alphabet shares lost 10.4% in premarket trading, while Microsoft gained 2.1% after the companies reported contrasting quarterly results.
Alphabet reported third-quarter revenue of USD 127.6 billion, below analysts' USD 128.2 billion estimate. Advertising revenue totaled about USD 82 billion, also missing expectations. Meanwhile, the company recorded negative free cash flow of USD 9.07 billion, marking its second consecutive quarter in which capital spending exceeded cash generated from operations.
The Google parent maintained its 2026 capital spending forecast of USD 195 billion to USD 205 billion. Finance chief Anat Ashkenazi also said spending would increase substantially in 2027. Although Google Cloud revenue more than doubled to USD 30.71 billion, slower search advertising growth weighed on results. The premarket share decline put more than USD 400 billion in market value at risk if losses held.
Microsoft reported USD 92.3 billion in fiscal first-quarter revenue, an increase of 19% from a year ago. Azure revenue rose 48% to USD 33.17 billion, while free cash flow reached USD 18.6 billion, above analysts' expectations. Microsoft also forecast Azure growth of 49% to 50% for the current quarter.
However, Microsoft's quarterly capital spending of USD 45.2 billion fell short of its own USD 50 billion projection. The company attributed the difference to delayed deliveries of third-party data center capacity. Elsewhere in technology, cybersecurity company Fortinet slid 26.2% before the opening bell, while ServiceNow declined 19.6% following its quarterly results.
The Federal Reserve left its benchmark rate unchanged at 3.75% to 4% on Wednesday. Policymakers voted 10โ2, with Lisa Cook and Beth Hammack favoring an increase of 0.25 percentage points. The central bank said economic activity continued to expand strongly but inflation "remains elevated."
The decision followed a quarter-point increase in September. As a result, investors turned to Thursday's scheduled inflation release for further guidance on borrowing costs. Futures markets indicated a greater than 81% probability of another rate increase in December, according to CME FedWatch data cited in premarket reporting.
Brent crude fell 1.1% to USD 114.05 a barrel by 9:22 a.m. GMT, while West Texas Intermediate declined 1.5% to USD 101.27. Prices eased after reports that U.S. Vice President JD Vance sought to reopen peace negotiations with Iran. However, a senior Iranian official reportedly rejected proposals conveyed through Qatari mediators as "unacceptable."
The U.S. Bureau of Economic Analysis scheduled September's personal consumption expenditures inflation report and its initial estimate of third-quarter economic growth for 8:30 a.m. ET. Those reports will give investors additional measures of price pressures and economic activity following the Fed's latest policy meeting. Meanwhile, the 10-year Treasury yield hovered near 5%.
Caterpillar shares declined 9.7% despite beating quarterly profit and revenue expectations. The company earned an adjusted USD 7.20 per share on USD 20.68 billion in revenue. In chipmaking, Marvell Technology fell 12.4% following reports of advanced talks to acquire optical components maker Lumentum. Lumentum gained 4.8%, although neither company had confirmed a transaction.
Other corporate results produced gains. Eli Lilly rose 3.9% after raising its annual revenue outlook above Wall Street forecasts. Carvana advanced 7.5% following stronger-than-expected quarterly revenue, while Chipotle gained about 7% on better-than-expected comparable sales. Amazon and Intel were due to release earnings after Thursday's closing bell.
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