Tech Giants Face Spending Scrutiny, Geopolitical Tensions Escalate, ECB Holds Rates

This quarter, it's clear that companies are going to be judged on their spending habits. Alphabet and Tesla have found out the hard way, with investors sending the stocks lower despite solid results.

Meta, Microsoft, Amazon and Apple are all scheduled to release results over the coming days, with funding the AI boom now a key metric when assessing the balance sheet.

Shares in the two heavyweights sank on Wednesday after their capex and spending plans spooked investors, despite a solid set of earnings for the quarter.

For Google parent Alphabet, better-than-expected revenues were overshadowed by an expected capex spend of up to $205 billion for 2026.

"The increase in the range is primarily due to an acceleration in the delivery of capacity to meet growing demand," Chief Financial Officer Anat Ashkenazi told analysts.

Meanwhile, Tesla is concerning investors with skyrocketing costs. Free cash flow turned negative as Elon Musk looked to pivot the company beyond vehicle sales into driverless robotaxis and humanoid robots.

Once again, a beat on quarterly revenue expectations was clouded by a 142% increase in capital expenditure. The company has previously said it could top $25 billion this year.

Over the coming days, we will get more details on spending plans from across the tech space, with results from Meta, Microsoft, Amazon and Apple all due over the next two weeks.

In Europe, Italian banking giant Unicredit has topped forecasts with a net profit of 2.9 billion euros ($3.3 billion) for the second quarter. Speaking exclusively to CNBC, CEO Andrea Orcel said the bank has reached "the best outcome it could hope for" in its acquisition of Commerzbank shares, saying a final agreement will be in the best interests of both banks.

Crude prices were driving higher in early trade on Thursday. Several developments are keeping oil elevated, including renewed threats by U.S. President Donald Trump to strike key Iranian infrastructure.

Another attack on a tanker off the coast of Saudi Arabia also kept tensions high. U.S. Central Command confirmed the 12th night of strikes in retaliation for the targeting of ships had taken place.

In a note published early Thursday, Goldman Sachs said "Brent might exceed $120/bbl in the fourth quarter, and average $100 in 2027" if the disruptions to the Strait of Hormuz continue.

The European Central Bank is expected to hold rates steady at 2.25%. Policymakers will meet later today, as renewed hostilities in Iran have prompted a rethink of the interest rates path amid an "extremely volatile" outlook.

President Donald Trump has threatened to bomb the Iranian underground nuclear facility Pickaxe Mountain, ratcheting up tensions between the U.S. and Iran.

The president's comments have put renewed focus on one of Iran's most secure and protected facilities.

Following Trump's earlier comments in early July, David Albright, a nuclear weapons expert and founder of the U.S.-based non-profit Institute for Science and International Security, said the mountain is large enough to hold a centrifuge enrichment plant as well as nuclear weaponization activities.