US stock index futures dip as Alphabet earnings underwhelm

U.S. stock index futures fell on Tuesday evening, pressured chiefly by losses in technology stocks as underwhelming earnings from Google owner Alphabet raised more questions about artificial intelligence demand.

Futures retreated after a positive session on Wall Street, as investors were relieved by President Donald Trump postponing plans to impose steep trade tariffs on Canada and Mexico. But Trump’s tariffs on China still took effect, drawing ire and retaliation from Beijing.

Concerns over a brewing trade war had battered Wall Street on Monday, with U.S. stock benchmarks still struggling to recover from those losses.

S&P 500 Futures fell 0.4% to 6,042.25 points, while Nasdaq 100 Futures fell 0.5% to 21,569.0 points by 19:05 ET (00:05 GMT). Dow Jones Futures fell 0.1% to 44,642.0 points.

Alphabet slides as Q4 earnings underwhelm
Alphabet’s class A shares (NASDAQ:GOOGL) slid 7.4% in aftermarket trade, after the company’s fourth-quarter revenue missed expectations, especially on disappointing earnings from its cloud division, which is closely tied to AI.

The print raised questions about just how much of an earnings driver AI was, following a similar pattern from peer Microsoft’s earnings last week. Alphabet, like Microsoft (NASDAQ:MSFT), signaled that it will spend vast amounts of capital on AI in 2025.

Wall Street’s AI spending has come under heightened scrutiny in recent weeks, especially with the release of China’s DeepSeek R1 AI model, which appeared to operate on a substantially smaller budget.

This had triggered a massive rout in tech valuations last week, one that Wall Street is still struggling to recover from. Alphabet’s earnings could trigger a fresh tech rout, although the company’s Wall Street peers were largely unchanged in aftermarket trade.

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Wall St shrugs off China trade jitters; more earnings awaited
Wall Street indexes ended Tuesday’s session higher, aided by a round of dip buying after steep losses on Monday.

Investors largely looked past a brewing trade war with China, after Trump’s 10% tariffs against the country took effect. Beijing retaliated with its own import tariffs and export controls, and also launched an antitrust investigation into Google.

Trump signaled that he was in no hurry to negotiate with Chinese President Xi Jinping, with the tariffs now set to remain in place for the foreseeable future.

Analysts warned that increased trade tariffs- which will be borne by U.S. importers, could underpin inflation and pressure growth.

The S&P 500 rose 0.7% to 6,037.83 points, while the NASDAQ Composite rose 1.4% to 19,654.02 points on Tuesday. The Dow Jones Industrial Average rose 0.3% to 44,556.04 points.

More major earnings are on tap this week, with magnificent seven member Amazon.com Inc (NASDAQ:AMZN) set to report on Thursday. Before that, prints from Uber Technologies Inc (NYSE:UBER), Walt Disney Company (NYSE:DIS), Qualcomm Incorporated (NASDAQ:QCOM), and MicroStrategy Incorporated (NASDAQ:MSTR) are due on Wednesday.