Dow Jones futures fell early Thursday, along with S&P 500 and Nasdaq futures, as the stock market remains deeply divided. Google-parent Alphabet (GOOGL) reported strong earnings but stunned investors with massive AI capital spending, signaling a broader trend among tech giants.
Market Turmoil and Tech Sell-Off
The stock market saw further pain for tech stocks on Wednesday, with Advanced Micro Devices (AMD) leading the carnage, plunging 17.3% despite beating views. The Nasdaq fell to a 2026 low, while the S&P 500 briefly undercut its 50-day line. AI-related names and high-beta stocks broadly tumbled, including software, chips, and space plays like Rocket Lab (RKLB).
However, the market wasn't all red. Consumer staples, housing, regional banks, and medicals saw investors piling in. The Dow Jones Industrial Average rose 0.5%, buoyed by stocks like Amgen (AMGN) and Apple (AAPL), which continued its strong post-earnings move.
Bitcoin and Commodities Dive
Bitcoin tumbled below $70,000, hitting 52-week lows as the crypto market faces intense pressure. Silver futures plunged, gold fell, and crude oil dropped 2% amid U.S.-Iran talks. The 10-year Treasury yield dipped to 4.26%.
Google's AI Spending Spree
Google's earnings and revenue modestly beat Q4 views, with Google Cloud also topping forecasts. But capital spending blew out estimates and guided substantially higher for 2026. This follows similar announcements from Microsoft, Meta Platforms, and Tesla, all setting big spending plans for AI infrastructure.
Google stock fell solidly early Thursday, signaling a move below key buy points. Meanwhile, Coherent (COHR) reported strong results but shares plunged, while Boot Barn (BOOT) and EZcorp (EZPW) showed strength.
Sector Performance and ETFs
Growth ETFs took a hit: the Innovator IBD 50 ETF (FFTY) tumbled 3.7%, the iShares Expanded Tech-Software Sector ETF (IGV) shed 1.8%, and the VanEck Vectors Semiconductor ETF (SMH) skidded 3.9%. ARK Innovation ETF (ARKK) plunged 4.7% to a seven-month low.
On the upside, SPDR S&P Homebuilders ETF (XHB) stepped up 3.4%, the Energy Select SPDR ETF (XLE) advanced 2.25%, and the Health Care Select Sector SPDR Fund (XLV) rose 1.25%, with Eli Lilly as the top holding.
What to Do Now
Divided markets are volatile. Will stronger sectors lift the whole market, or will techs drag everything down? So far, software and crypto woes have spread to tech and AI plays, but other sectors are holding up or powering higher.
Investors should be cautious: cut losses quickly, limit exposure to technology, and avoid getting excited by bounces in hard-hit techs. It's a time to nibble on opportunities outside of tech but not to step on the gas. Stay engaged and prepared to take action in either direction.
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