Feb 6 (Reuters) – U.S. stock index futures rose on Friday following a bruising selloff in technology shares this week, while Amazon dropped after becoming the latest Big Tech company to crank up its spending toward artificial-intelligence infrastructure.
Amazon slid 7.2% in premarket trading, after the company forecast a more than 50% jump in capital expenditures this year, intensifying the AI-driven spending spree already underway among its “Magnificent Seven” peers.
Investor skepticism around AI spending has heightened since Microsoft’s blowout capex plans announced late last month thrust mega-cap investment budgets into the spotlight. Nvidia, which stands to benefit from heavier AI spend and remains the last Mag 7 company to report, rose 3%.
“Sentiment toward the Mag 7 complex has deteriorated sharply, with investors as disengaged from this mega-cap basket as at any point since the term was first coined,” said Pepperstone’s Chris Weston.
Software and data-services shares began to find their footing after a punishing week fueled by worries that fast-improving AI tools could erode demand for traditional businesses.
ServiceNow and CrowdStrike were up 2.1% and 2.6%, respectively. Still, the S&P 500 Software and Services index was headed for a near 10% decline in the week, its worst performance since March 2020.
“The Street has made it clear this quarter that there is little tolerance for capex without accompanying monetization. The cash burn cannot last forever,” said Ryan Lee, senior vice president of product and strategy at Direxion.
The Nasdaq closed at its lowest in more than two months amid a broad tech selloff on Thursday, deepened by Alphabet’s surging capex plan. The tech-heavy index was on track for its steepest weekly decline in more than 10 months.
Alphabet slipped 1%, while Microsoft gained 1.4%. Chip stocks Broadcom and Micron Tech, all caught in the cross-currents of the tech rout, rose 3.9% each.
The CBOE volatility index, Wall Street’s fear gauge, dropped for the first time in three days, down 1.64 points at 20.13.
At 07:00 a.m. ET, Dow E-minis were up 279 points, or 0.57%, S&P 500 E-minis were up 45.25 points, or 0.66%, and Nasdaq 100 E-minis were up 203.5 points, or 0.83%.
The S&P 500 was set for its worst week in more than four months.
The AI trade, one of the biggest engines of last year’s rally, is facing a substantial stress test as money flows into defensive havens such as consumer staples and telecoms. That rotation is unfolding just as risky assets are scaling back, with bitcoin down 50% from its October peak.
Futures of the small-cap Russell 2000 index were up 1.3%. Both the S&P 600 small-cap index and the S&P 400 mid-cap index were headed for about 1% gains this week.
Roughly 80% of the 270 S&P 500 companies that have reported quarterly earnings so far have beaten analyst expectations, according to LSEG data. In a typical quarter, that rate is 67%.
Coty withdrew its full-year forecast, sending shares of the CoverGirl owner down 13%.
Molina Healthcare slumped nearly 28% after the health insurer forecast 2026 profit at less than half of Wall Street expectations. Centene forecast annual profit above estimates, yet its shares fell 6%.
Roblox jumped 11% after the video game platform projected fiscal 2026 bookings above Wall Street expectations.
(Reporting by Pranav Kashyap in Bengaluru; Editing by Shilpi Majumdar)
