European Shares Seen Lower Amid AI Spending Concerns
(RTTNews) – European stocks are seen opening a tad lower on Thursday after U.S. technology companies outlined significant capital spending plans, stoking fresh concerns about future returns on investment.
Both Alphabet and Tesla reported negative free cash flow in their quarterly earnings, causing investors to overlook their strong revenue performance.
IBM’s second-quarter 2026 results missed Wall Street expectations on both earnings and revenue. The company also lowered its full-year growth forecast, underscoring ongoing challenges despite the AI boom.
Intel will report its second quarter earnings after the U.S. closing bell later today, with Wall Street forecasting $14.42 billion in revenue, the fastest growth in six years.
Escalating Middle East tensions may also keep investors on edge after Yemen’s Iran-aligned Houthis claimed an attack on two Saudi oil tankers transiting through the Red Sea.
Syed Abbas Araghchi, Iran’s foreign minister, said his country would adopt an “eye for an eye” defense doctrine as the U.S. military carried out a 12th straight night of strikes against Iran.
The latest escalation has pushed WTI crude toward $89 a barrel, while Brent crude prices extended gains for a fifth straight session to surge above $96 a barrel.
Asian markets were broadly higher while U.S. equity futures dipped after the release of earnings from major technology companies.
The U.S. dollar extended modest losses from the previous session ahead of next week’s Federal Reserve meeting, with traders expecting no change in policy rates.
Gold slipped to $4,124 an ounce, easing from a two-week high amid West Asia tensions.
Overnight, U.S. stocks struggled for direction before finishing lower as investors weighed escalating Middle East tensions and awaited key tech earnings for direction.
As the U.S. military competed its 11th consecutive day of strikes on Iran, Secretary of State Marco Rubio said the U.S. remains open to a diplomatic settlement of the conflict, but Iran is “not serious about talks.”
In a post on Truth Social, President Donald Trump threatened to bomb and destroy one Iranian bridge or power plant any time Iran shoots at a ship in the Strait of Hormuz.
The tech-heavy Nasdaq Composite dropped 0.6 percent as short-term Treasury yields hit 17-week highs and oil prices climbed another 3 percent. The S&P 500 slid 0.1 percent and the Dow finished marginally lower.
European stocks ended higher on Wednesday, with encouraging corporate earnings announcements and soft U.K. inflation data helping underpin investor sentiment.
The pan-European STOXX 600 advanced 0.6 percent. The German DAX rose 0.6 percent, France’s CAC 40 added 0.9 percent and the U.K.’s FTSE 100 surged 1.2 percent.
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