Wall Street Mixed as Rising Crude Oil Prices and Massive AI Spending Weigh on US Stocks
US stock markets closed on a cautious note on Thursday as skyrocketing global crude oil prices and heavy corporate spending on Artificial Intelligence (AI) kept investors on edge. While tech megacaps showed resilience, rising Treasury yields and Middle East tensions continue to pressure broad market sentiment.
Key Highlights:
- Market Indices Performance: The Nasdaq Composite declined 0.57% to 25,690.90, while the S&P 500 slid 0.14% to 7,498.96. The Dow Jones Industrial Average remained virtually flat at 52,218.58.
- Tech Capex Under Scrutiny: Tech giant Alphabet reported strong quarterly revenue of $119.8 billion with Cloud revenue surging 82%. However, its stock faced pressure after raising its 2026 AI capital expenditure plans to over $195 billion.
- Crude Oil & Inflation Fears: Benchmark Brent crude hovering near $100 per barrel has raised fresh concerns over persistent inflation, dampening hopes for immediate Federal Reserve interest rate cuts.
- Major Tech Deals: Semiconductor giant AMD surged after announcing a massive multi-billion dollar AI infrastructure deal with AI safety startup Anthropic.
Heavy AI Infrastructure Investments
Investors are closely tracking Q2 earnings from major tech leaders to evaluate if record-breaking spending on data centers and AI hardware is delivering sustainable returns. While hardware suppliers and chipmakers continue to see robust order backlogs, broader market participants are demanding clearer paths to long-term profitability.
Economic Outlook
Adding to market uncertainty, 10-year US Treasury yields held firm near 4.63%, reflecting prolonged elevated borrowing costs across commercial and consumer lending sectors. Analysts suggest that unless global energy supply routes stabilize, US stock indices may remain range-bound in the near term.