Stocks Fall as Alphabet's $205 Billion Capex Forecast Stokes AI Spending Fears; Nasdaq 100 Futures Down 0.6%

Bloomberg and Yonhap News Agency reported that stocks fell as unease over ever-higher AI investment outweighed an otherwise strong earnings report from Alphabet.

Nasdaq 100 futures dropped 0.6%. Alphabet fell more than 3% in late trading after raising its capital spending forecast to as much as $205 billion for this year, up from an earlier projection of $190 billion and more than double its 2025 outlay. The Stoxx 600 fell 0.7% ahead of the ECB policy decision.

The outlook for higher spending boosted Asian chipmakers, with South Korea's KOSPI gaining 4.4% to 7,096.89. Foreigners were net buyers for a fourth consecutive day, snatching up 2.1 trillion won. Samsung rose 3.65% and SK hynix jumped 4.85%. Alphabet's cloud revenue jumped 82% on-year, driving the buying spree on anticipation memory chip demand will continue.

STMicroelectronics plunged the most in a year after forecasting third-quarter sales that missed estimates. IBM cut its full-year sales outlook including its software unit after a dip in mainframe demand.

Brent rose 3.6% to $97.42 a barrel, a fifth straight day of gains, after the Red Sea became another flashpoint for disruption. Treasury yields advanced, with 10-year yields up one basis point to 4.67%.

Natixis IM's Mabrouk Chetouane said there are always doubts about whether massive investments will deliver, but tech companies cannot afford not to spend big. He said the momentum on capex is in full swing and strong demand for semiconductors isn't going away.

BNP Paribas reported better-than-expected revenue and profit. UniCredit said it will likely assume control over Commerzbank soon. TotalEnergies' second-quarter profit surged as the Iran war boosted crude prices. Nestle agreed to sell a 50% stake in its bottled water business for about €3 billion.