Nasdaq futures plunge 260 points: 5 things to know before Wall Street opens

US stock futures were mixed on Thursday, with technology shares under pressure after Alphabet's results revived concerns about the cost of artificial intelligence.

Nasdaq 100 futures fell 260 points, or 0.87% and S&P 500 futures slipped 0.28%, while Dow futures were trading flat.

Alphabet tumbled 10.2% in pre-market trading, contrasting with a 3.6% gain for Microsoft as investors distinguished between companies spending heavily on AI and those generating cash.

Attention now turns to US inflation and growth figures, another round of corporate earnings and an unexpected leadership shake-up at the European Central Bank ahead of the opening bell.

5 things to know before Wall Street opens

1. Alphabet's sell-off exposes a widening AI divide

Google's parent reported third-quarter revenue of $127.6 billion, below expectations, despite Google Cloud sales more than doubling. Its negative $9.07 billion free cash flow sharpened questions about the returns from data-centre investment.

Microsoft offered a contrast, reporting $18.6 billion in positive free cash flow and 48% Azure growth.

The pressure spread to software and chipmakers: Fortinet fell 25%, ServiceNow lost 18.2%, AMD declined 2.8% and Intel slid 3.7% in early trading.

2. The Fed pause meets its first economic test

Policymakers held interest rates at 3.75%–4% on Wednesday, but Lisa Cook and Beth Hammack voted for a quarter-point increase.

Futures markets indicated an above-81% probability of tightening in December. At 8:30 am Eastern, investors are due to receive September's Personal Consumption Expenditures inflation figures, advance third-quarter GDP and weekly jobless claims.

Economists expect annualised GDP growth of about 3.2% and monthly core PCE inflation of 0.3%.

3. Amazon and Intel face the next earnings test

Both companies are scheduled to report after the closing bell, with Amazon's AWS growth and capital spending plans under particular scrutiny following Alphabet's sell-off.

Intel's report will offer another assessment of semiconductor demand and its ability to capitalise on AI infrastructure investment.

4. Lagarde's resignation jolts the ECB's policy outlook

European Central Bank President Christine Lagarde announced that she will leave office on 7 February 2027, months before her term expires in October.

The surprise came ahead of the ECB's rate decision at 9:15 am Eastern Time, when policymakers are widely expected to leave their deposit rate at 2.5%.

With energy-driven inflation still a concern, investors will look for clues about possible December tightening.

5. Oil retreats, but supply risks remain unresolved

Brent crude slipped 1.1% to $114.05 a barrel by 09:22 GMT, while US West Texas Intermediate fell 1.5% to $101.27. Reports of renewed US-Iran diplomatic contacts encouraged traders to trim geopolitical exposure.

Yet continuing Houthi attacks and threats to regional shipping leave energy markets vulnerable to disruption.