Alphabet's Earnings Beat Expectations, but Stock Falls Amid Cash Burn Concerns

Alphabet's earnings report beat expectations, but its stock fell by 3% due to concerns about rising cash burn and delays in its Gemini AI model. The company's capital expenditure boost is expected to reach $200 billion this year, with a significant portion allocated to AI-related investments.

The decline in Alphabet's stock price was mirrored in the broader tech sector, with chip stocks experiencing a mixed reaction. South Korean chip-heavy stocks rose by over 4%, but Europe's STMicroelectronics dropped 14% after missing earnings estimates.

Wall Street futures were down ahead of the bell on Thursday, and European shares edged lower as tech stocks declined, led by STMicroelectronics' disappointing results. The resurgent oil prices are putting pressure on interest rate and bond markets, with short-term U.S. Treasury yields reaching their highest level in around 17 months.

The European Central Bank is set to decide on policy later today, amid an alarming rise in natural gas prices as the winter re-stocking season gets underway. The inflation impact from spiraling natural gas prices is likely to be hawkish, with futures markets pricing in two ECB hikes by year-end and two Federal Reserve hikes within nine months.