AI Stock Rally Loses Steam Ahead of Key Big Tech Earnings

By Dow Jones Newswires Staff

U.S. stock futures fell in early European trade as a rally in technology stocks lost steam ahead of earnings that will help shape investors' prognosis for artificial-intelligence companies.

Asian equities pared gains as the trading day progressed, while Nasdaq futures dropped as chip makers that have driven market swings in recent days fell back. Alphabet will post earnings after market close, with investors watching for whether the Google-owner will press on with its huge investments in AI. Tesla earnings will also be closely watched.

Elsewhere, oil prices rallied further with Brent crude trading above $94 a barrel in the absence of concrete steps toward a renewed ceasefire agreement between the U.S. and Iran, as American forces continued to pound Iranian sites.

Higher oil prices kept sovereign bond yields and the dollar close to recent highs, as investors prepare for a significant issuance of 20-year U.S. Treasurys.

--In early European trading, the global oil benchmark climbed 4.1% to $94.72 a barrel, the highest in nearly seven weeks, while WTI futures were up 4.1% to $87.78 a barrel. Traffic through the Strait of Hormuz declined sharply, while several tankers are moving to avoid the Bab el-Mandeb Strait, market watchers said. Meanwhile, the Caspian Pipeline Consortium stopped receiving oil from Kazakhstan after suspending loadings due to attacks on oil tankers at its Black Sea terminal, according to reports. "Factoring in the renewed disruptions from the Persian Gulf, risks to Saudi crude exports from the Red Sea, and developments in the Black Sea, one may argue that Brent at just over $91 a barrel is undervalued," analysts at ING said. "Particularly if these disruptions persist into August."

--In the U.S., futures for the S&P 500 were down 0.3%, while the Dow Jones Industrial Average fell 0.2%. Nasdaq futures were 0.9% lower. Chip stocks fell in after-hours trade after posting sharp gains in the last session. For example, Intel slipped 3.2% in extended trading after jumping over 8% Tuesday. As well as Alphabet and Tesla, Philip Morris, Texas Instruments and IBM are among companies posting earnings Wednesday.

--Equities were mixed across Asia. South Korea's Kospi rose 0.7% amid relatively muted trade for the index's dominant chip makers, with SK Hynix closing 0.3% lower while Samsung Electronics nudged 0.6% higher. In Japan, the Nikkei 225 fell 0.2%, while Singapore's FTSE Straits Times Index advanced 0.6%. Hong Kong's Hang Seng Index fell 1.0% as technology stocks slumped, with Tencent sliding 6.8% and leading a broader plunge in Asian gaming stocks.

--European equities were mixed in early trade as a rally in technology stocks stutters. The Europe-wide Stoxx 600 dropped 0.1%. London's FTSE 100 edged 0.1% higher as metals miners rose. In Paris, the CAC 40 rose 0.3%, reversing an earlier fall as luxury stocks pared losses. Airbus lifted the index, rising 7% after the group forecast a profitability bump. The cross-listed aircraft maker also supported the German DAX, which edged 0.1% higher. AI-related stocks weighed on the Dutch AEX, which fell 0.7% as ASML drops 2.25%. Santander falls 1% after earnings, dragging Spain's IBEX 35, which fell 0.4%. The FTSE MIB edged 0.1% higher.

--The dollar eased but remained close to a one-week high reached overnight as oil prices rose. The rise in oil prices along with natural gas and other commodity prices has lifted near-term inflation expectations, Deutsche Bank analysts said in a note. "That backdrop meant investors priced in more Federal Reserve rate hikes, and speculation even returned about a potential rate hike next week." The DXY dollar index fell 0.1% to 101.127 after reaching a high of 101.210 overnight.

--U.S. Treasury yields were trading little changed in Asian trade, as investors navigated between higher oil prices and hopes of an end to hostilities between the U.S. and Iran. Investors will also gauge demand at the Treasury's $13 billion auction of 20-year bonds. "Given a higher level of outright yields and less supportive valuations, we think [Wednesday's] auction can be digested smoothly," strategists at J.P. Morgan said in a note. The two-year Treasury yield declined 0.6 basis point to 4.254%, while the 10-year Treasury yield was up 0.2 basis point at 4.629%.

--Eurozone government bond yields opened slightly higher as oil prices increased, while lower-than-expected headline U.K. inflation for June had little immediate impact. Brent was up 2% to $92.85 per barrel as hostilities in the Middle East continued. U.K. headline inflation decelerated to 2.6% in June from 2.8% in May, coming in below analysts' expectations of 2.7% in The Wall Street Journal's poll. The 10-year Bund yield rose 1.6 basis points to 3.180%.

--Bitcoin fell modestly as investors took profits after the cryptocurrency reached a five-week high in the previous session. Tuesday's gains were driven by renewed institutional demand, regulatory optimism and investors being forced to close earlier bets against bitcoin as the cryptocurrency strengthened, Zaye Capital Markets analyst Naeem Aslam said in a note. However, the escalating U.S.-Iran conflict create uncertainty for bitcoin prices, he says. The cryptocurrency fell 0.8% to $65,870 after reaching a high of $66,919 Tuesday.

--New York gold futures rose 0.9% to $4,114.50 a troy ounce.

Write to Barcelona Editors at barcelonaeditors@dowjones.com

(END) Dow Jones Newswires

July 22, 2026 04:29 ET (08:29 GMT)