SPY, QQQ Decline As US Equities Fall: Alphabet’s Increased AI Spending Spooks Investors

• Alphabet stated on Wednesday that it expects capex to reach $175 billion to $185 billion this year.
• At the top end, this would be more than double the capex spend of $91.45 billion in 2025.
• The company said that its investments in AI computing capacity were central to its capex plans for 2026.

U.S. stocks opened on a negative note on Thursday as investors turn their focus to Amazon.com Inc.’s (AMZN) earnings, amid a risk-off stance toward tech stocks.

The SPDR S&P 500 ETF (SPY), which mirrors the S&P 500 index, was down by 0.55% at the time of writing, while the Invesco QQQ Trust (QQQ), which mirrors the Nasdaq 100 index, fell 0.44%. The SPDR Dow Jones Industrial Average ETF Trust (DIA), which tracks the Dow Jones Industrial Average, declined 0.55%.

“The recent heavy selling in both AI and software has made the entire tech sector more volatile, with many market participants appearing to sell at the first sign of danger,” said analysts at Schwab Center for Financial Research in their latest note.

Alphabet Projects Increase In AI Spending

After announcing in October 2025 that it expects a “significant increase” in capital expenditure in 2026, Alphabet stated on Wednesday that it expects capex to reach $175 billion to $185 billion this year. At the top end, this would be more than double the capex spend of $91.45 billion in 2025.

The company said that its investments in AI computing capacity were central to its capex plans for 2026. “We are seeing our AI investments and infrastructure drive revenue and growth across the board,” Alphabet CEO Sundar Pichai told analysts during a post-earnings conference call on Wednesday.

While the S&P 500 was down by 37 points at the time of writing, hovering at 6,845, the Dow Jones Industrial Average was down by 0.56%, and the Nasdaq Composite was down by 0.51%.

Layoffs In January Highest Since 2009

Layoffs in January hit the highest levels since 2009, with U.S.-based employers announcing 108,435 job cuts during the month, according to the latest report by consulting firm Challenger, Gray & Christmas.

The report added that this is the highest since January 2009, when 241,749 job cuts were announced.

Meanwhile, U.S. jobless claims rose to 231,000 for the week ended Jan. 31, 2026, according to Department of Labor data released on Thursday. This was higher than the 212,000 claims expected by Wall Street, according to a Dow Jones consensus as cited by MarketWatch.

Also See: Apple Maps And Ads Escape Designation As Gatekeepers Under EU's Digital Markets Act

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Share

·

Add us on