US equity futures dropped sharply as concerns resurfaced over the financial burden of artificial intelligence investments. Alphabet’s announcement of up to $205 billion in capital spending for the year fueled investor unease, especially after Tesla disclosed plans to increase its own AI-related investments. The tech sector faced significant selling pressure, reflecting doubts about whether such large expenditures will lead to proportional returns. Analysts are increasingly questioning the long-term viability of current market valuations amid rising costs and uncertain profitability.
Oil prices climbed toward $100 per barrel following attacks on two Saudi oil tankers in the Red Sea by Houthi militants. The incident heightened fears over the stability of key maritime trade routes and added to existing supply constraints from OPEC+ production cuts. Stephanie Roth of Wolfe Research highlighted the potential impact on inflation, warning that higher energy costs could challenge central banks’ efforts to control price growth. As tensions persist, markets are adjusting by assigning a greater risk premium to energy assets.