U.S. Stock Market Futures on Thursday: Microsoft share price crashes, Meta, Tesla stocks jump big in premarket trading

Microsoft share price dropped 7.5 per cent in premarket trading on Thursday as its cloud revenue failed to impress, stoking fears the hefty ‌outlays behind its OpenAI alliance are not translating into monetization fast enough. Meta stocks jumped almost 9 per cent in premarket trading as the social media giant paired an upbeat revenue forecast with a 73 per cent jump in this year's capex ‌budget. Tesla rose ‌2.4 per cent after outlining plans to more than double its capital expenditure to a record level.

U.S. stock index futures edged higher today, as investors weighed results from tech mega-caps that included another surge in AI-related spending, while the Federal Reserve held rates steady as widely expected. At 07:00 a.m. (ET), Dow ‌E-minis were up 9 points, or 0.02 per cent, S&P 500 E-minis were up 13 points, or 0.19 per cent, and Nasdaq 100 E-minis were up 54.5 points, or 0.21 per cent.

The latest results from three of the so-called "Magnificent Seven" companies suggest investors are willing to overlook massive AI expenditures so long as they expect them to yield tangible returns.


The group, which represents about one-third of the S&P 500's market cap, has driven a sustained rally in U.S. equities, and continues to trade at elevated prices.

"Traders ​are no longer rewarding the biggest spenders, and Microsoft's elevated capex appears to ​have spooked them, leaving doubts that the continued spend will deliver a clear path to profit," said Jake Behan, ‌head of capital markets ‍at Direxion.

"Capex remains the market's central concern for hyperscalers, as trader focus shifts from growth ‍optics to the timing and payoff of AI investment."

In other notable earnings, Honeywell shares gained marginally after reporting a rise in quarterly revenue and profit, while Caterpillar added 2 per cent on posting a higher profit for the quarter.

Southwest Airlines' shares rose 5.3 per cent after the airline forecast a stronger-than-expected annual profit despite U.S. winter storm disruptions.

Dow said it would slash about 4,500 jobs in restructuring, aiming to boost profitability by at least $2 billion. Shares fell 1 per cent. Apple rose 0.8 per cent ahead of its results ‍after markets close. Bellwether IBM jumped 9.5 per cent after beating estimates in its fourth-quarter earnings. USA Rare Earth fell 9.6 per cent, MP Materials was down 5.1 per cent, while Critical Metals and United States Antimony dropped over 5 per cent each.