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US STOCKS-Nasdaq lags on angst over AI spending ahead of earnings reports
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US STOCKS-Nasdaq lags on angst over AI spending ahead of earnings reports
Jul 24, 2026 1:32 PM

* Indexes mixed with Nasdaq lagging, Dow gaining

* Falling oil prices offer some relief

* Intel ( INTC ) falls despite upbeat quarterly revenue, profit

forecast

* Digital Realty ( DLR ) shares rally on upbeat outlook

(Updates with preliminary closing prices)

By Sinéad Carew and Ragini Mathur

July 24 (Reuters) - The tech-heavy Nasdaq fell on Friday as

investors sold chip stocks on worries about massive spending on

artificial intelligence ahead of the next batch of megacap

earnings reports, while falling oil prices provided Wall Street

with some support even as Middle East hostilities continued.

The S&P 500 ended close to flat but its biggest weight came

from the S&P 500 technology index, which

underperformed the broader market as chip stocks fell.

While investors wait for results from megacaps Microsoft ( MSFT )

, Amazon.com ( AMZN ), Meta and Apple Inc ( AAPL )

, their enthusiasm was weakened by Alphabet's

announcement, late on Wednesday, of a plan to hike capital

spending even as it burns cash.

After piling into technology stocks in recent years, on the

promise of growth from AI, investors have become worried about

the need for ever-increasing capital outlays for AI, according

to Peter Andersen, CEO of Andersen Capital Management.

"People are thinking, how do we make sense of all this

spending, and how much more patient do we have to be before we

actually see it translate to actual profits?" Andersen said.

"The fear of missing out is becoming more like a fear of

massive overbuilding."

Late on Thursday, Intel ( INTC ) forecast quarterly profit

and revenue above Wall Street estimates and outlined plans to

increase spending over the next two years. Still, the

chipmaker's shares sank on Friday along with the Philadelphia SE

Semiconductor index.

According to preliminary data, the S&P 500

gained 3.74 points, or 0.07%, to end at 7,413.30 points,

while the Nasdaq Composite lost 157.35 points, or 0.63%,

to 24,980.34. The Dow Jones Industrial Average

rose 235.87 points, or 0.46%, to 51,947.52.

Among the S&P 500's 11 major industry indexes, real estate

outperformed during the session. The sector's leading

gainer was Digital Realty Trust ( DLR ), which rallied after it

raised its full-year forecast for funds from operations.

Also providing some relief, crude oil futures fell more than

3% while traders booked profits from a massive rally in the last

five sessions and after sources said China was pushing to resume

stalled U.S.-Iran peace talks. Still, U.S. missiles struck

targets across Iran after President Donald Trump vowed "major

military punishment" for Tehran and its Houthi allies in Yemen.

"Whatever the headlines are involving the conflict right

now, that drives oil and then oil drives financial markets,"

said Andersen, adding that swings in oil prices can impact

consumer and corporate spending.

Also, the Trump administration imposed new tariffs of 10%

and 12.5% on goods from 60 trading partners, citing lax

enforcement of forced-labor bans. The move came as a temporary

10% global tariff expired.

Friday's data showed that activity in the U.S. services

sector accelerated in July, aided in part by spending around the

FIFA World Cup and the Independence Day holiday, while the pace

of growth in the manufacturing sector eased to the slowest since

March.

Among other individual gainers, SLB shares climbed

after the oilfield services firm beat expectations for

second-quarter profit.

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