Wall Street futures rise as Big Tech earnings test $3T AI rout

Nasdaq-100 futures rose 0.7% Monday as investors braced for a pivotal week of Big Tech earnings that will test whether AI spending is generating returns.

"The market is moving from pricing in promise to pricing in execution," Jeff Buchbinder, chief equity strategist at LPL Financial, said.

Dow futures added 0.2% and S&P 500 contracts gained 0.3%, a tentative rebound after the S&P 500 fell 1% last week and the Nasdaq Composite dropped 2.9%. The global semiconductor rout has erased more than $3 trillion in market value since June 22, with memory chip leaders Micron Technology and SanDisk falling more than 10% and 25%, respectively, over the past five sessions.

Alphabet and Tesla report Wednesday, the first of the Magnificent Seven to face investors this season. Hyperscalers are expected to spend $644 billion on AI infrastructure in 2026, up 79% year on year, and investors want evidence those investments are paying off.

Brent crude futures briefly broke above $90 a barrel last week before retreating, as the US-Iran conflict disrupted flows through the Strait of Hormuz. Goldman Sachs strategists said flows through the strait had fallen to between 3 million and 5 million barrels per day as of July 15, down from a recovery peak of roughly 10 million barrels per day in early July. The setback leaves the oil market short 13.4 million barrels per day from the Gulf, the strategists said.

Intel reports Thursday, offering a check-in on the chip trade after the sector's sharp selloff. IBM reports Wednesday, following a steep decline after CEO Arvind Krishna warned that enterprise clients are prioritizing spending on memory and AI infrastructure over mainframe computers and traditional software. AT&T, T-Mobile, and Verizon also report this week, providing a read on the telecom business after SpaceX's entry into the market.

"The bar is pretty high," Sylvia Jablonski, chief investment officer at Defiance ETFs, said. Semiconductor sales increased 79% year on year in the first quarter of 2026, and BNP Paribas expects second-quarter growth of 132%. The question is whether that demand translates into earnings power for the companies supplying the infrastructure.

The earnings results will set the tone for the broader market in the weeks ahead. If Big Tech delivers measurable returns on AI spending, the rotation out of semiconductors and into the Magnificent Seven could accelerate. If not, the selloff may deepen. Investors will watch Wednesday's after-market reports for guidance on second-half margins and capital expenditure plans.

This article is for informational purposes only and does not constitute investment advice.