U.S. stock futures are subdued as traders sift through rumors of possible trade deals and quarterly reports from big-name companies. Alphabet (NASDAQ:GOOGL)’s search and cloud units boost revenues, as the Google-owner targets huge capital expenditures this year to fund its artificial intelligence ambitions, while Tesla (NASDAQ:TSLA)’s shares dip after weak auto sales dragged down net income at the electric vehicle manufacturer. U.S. business activity data is due out, along with a fresh interest rate decision from the European Central Bank.
1. Futures mixed
U.S. stock futures hovered around both sides of the flatline on Thursday, as investors assessed a wave of corporate earnings and reports of more progress in global trade negotiations.
By 03:35 ET (07:35 GMT), the Dow futures contract had slipped by 152 points, or 0.3%, S&P 500 futures were flat, and Nasdaq 100 futures had gained 51 points, or 0.2%.
The main averages on Wall Street jumped on Wednesday, with the benchmark S&P 500 logging its 12th record close of 2025 and the tech-heavy Nasdaq Composite finishing above the 21,000 mark for the first time. Equities were bolstered by a Financial Times report that the U.S. and European Union were making progress toward a trade agreement that would place a baseline 15% tariff on items incoming from the bloc.
The rumors, which were later confirmed by Bloomberg News, came after President Donald Trump announced a trade pact with Japan on Tuesday that also included a 15% levy on imports into the United States. Analysts said the developments have helped to ease longstanding concerns over uncertainty around Trump’s tariff agenda as an August 1 deadline for his elevated “reciprocal” tariffs to kick in inches closer.
With roughly a fourth of firms in the S&P 500 having now reported their latest quarterly earnings, the second-quarter reporting period has been widely robust — 67% of these groups have topped analysts’ revenue estimates and 88% have surpassed earnings per share projections.
2. Alphabet revenue surges
Headlining the slate of results after the bell on Wednesday were Alphabet and Tesla — the first of the so-called “Magnificent 7” mega-cap tech giants to open their books.
At Alphabet, second-quarter revenue soared by 14% versus a year earlier to a new all-time peak of $96.4 billion, boosted by strength at its all-important search and cloud division.
But the Google-parent’s returns were tempered by its massive spending on artificial intelligence, which executives have targeted as a crucial source of future growth. Google has been folding AI into its search business recently to fend off intensifying competition from startups like OpenAI and Perplexity.
AI also represents a major opportunity for Alphabet’s advertising segment, allowing the company to present firms with ad campaigns that can squeeze out more returns. Total ad sales came in at $71.3 billion for the quarter, up 10.4% year-on-year, while its core search business expanded by 11.7%.
Google’s cloud unit, which offers computing power to data centers, posted a 32% increase in sales to $13.6 billion.
Still, as it has been for many of its tech rivals, investors are keen to see how the company plans to monetize its heavy AI spending. Alphabet said capital expenditures this year would rise by 13% to around $85 billion. In 2024, the figure stood at $52.5 billion.
Automation remains a key focal point at Tesla as well, with the electric vehicle titan hoping that its plans for self-driving cars and robotics will help fuel new revenue sources that can offset fading automotive demand.
Headwinds from the impending expiration of a federal tax credit designed to incentivize EV sales are also looming. CEO Elon Musk, whose recent political connections with Trump have been a fresh source of controversy for Tesla, told analysts that the firm could see “a few rough quarters.”
“I’m not saying we will, but we could — you know, Q4, Q1, maybe Q2, but once you get to autonomy at scale in the second half of next year, certainly by the end of next year, I think I’d be surprised if Tesla’s economics are not very compelling,” Musk said.
He added in an interview with the Wall Street Journal that Tesla remains in the “early stages” of its autonomous driving ambitions.
Weighed down by a sizable decline in automotive deliveries, group-wide revenue dropped by 12% to $22.5 billion. Net income slid to $1.17 billion, compared with $1.4 billion a year earlier.
Tesla’s shares slumped by more than 4% in after-hours dealmaking.
4. U.S. PMIs due out
On the economic data front, markets will be keeping tabs on the publication of flash purchasing managers’ index figures on Thursday
Economists anticipate that the preliminary manufacturing PMI reading from S&P Global (NYSE:SPGI) for July will come in at 52.7, down slightly from 52.9 in the previous month. A gauge of services activity is tipped to edge up slightly to 53.0 from 52.9.
Numbers above the 50-point mark indicate expansion.
Despite uncertainty around the trajectory of Trump’s aggressive tariffs, the U.S. economy has shown broad signs of resilience.
The stock market has touched record highs, retail sales have topped forecasts, consumer sentiment has improved and a sharp spike in inflation — much feared after Trump revealed his “reciprocal” tariffs in April — has not yet come to pass. However, analysts have flagged that the impact of the tariffs could materialize in the months ahead.
5. ECB decision
The European Central Bank is due to unveil its next policy decision on July 24, with investors widely anticipating that it will leave key interest rates unchanged.
Analysts widely expect the ECB to keep its key deposit rate steady at 2%.
At its last meeting in June, policymakers, bolstered by signs of flagging inflation and tepid economic activity in the 20-member euro zone, slashed rates by 25 basis points. It was the eighth reduction in a year, although it came with an indication from the ECB that it would likely pause in July, largely due to uncertainty around trade tensions with the Washington.
“[T]he ECB’s next steps will be heavily influenced by developments in the tariff dispute and its impact on growth expectations,” analysts at Erste Group said in a note.
