Feb 6 (Reuters) - U.S. stock index futures steadied on Friday after a bruising selloff in technology shares earlier this week, while Amazon dropped as it became the latest Big Tech company to crank up its spending toward artificial-intelligence initiatives.
Amazon slid 7.8% in premarket trading, after the company forecast a more than 50% jump in capital expenditures this year, adding on to the "Magnificent Seven" spending spree to expand AI infrastructure.
Investor skepticism around AI spending has
intensified since Microsoft's blowout capex plans announced late last month thrust Big Tech's investment budgets into the spotlight. Nvidia, which stands to benefit from heavier AI spend and the last Mag 7 company yet to report, rose nearly 2.7%.
Software and data-services shares began to find their footing after a punishing week fueled by worries that fast-improving AI tools could erode demand for traditional businesses.
ServiceNow and CrowdStrike were up 2.9% and 2.1%, respectively. Still, the S&P 500 Software and Services index was headed for a near 10% decline in the week, its worst performance since March 2020.
"The Street has made it clear this quarter that there is little tolerance for capex without accompanying monetization. The cash burn cannot last forever," said Ryan Lee, senior vice president of product and strategy at Direxion.
"While many of the hyperscalers mirrored Amazon's capex story, they at least beat elsewhere. Given Amazon was already the worst performer of the Mag 7 last year, the miss puts the company in a precarious position."
The Nasdaq closed at its lowest in more than two months amid a broad tech selloff on Thursday, led by Alphabet's surging capex plan and a continued slide in software stocks. The tech-heavy index was on track for its steepest weekly decline in more than 10 months.
Alphabet slipped 0.7% and Microsoft gained 1.6%. Chip stocks Broadcom and Micron Tech, all caught in the cross-currents of the tech rout, rose over 3.3% each.
The CBOE volatility index, Wall Street's fear gauge, dropped for the first time in three days, down 1.31 points at 20.46.
At 05:43 a.m. ET, Dow E-minis were up 102 points, or 0.21%, S&P 500 E-minis were up 24.5 points, or 0.36%, and Nasdaq 100 E-minis were up 110 points, or 0.45%.
The S&P 500 ended the prior session at its lowest level in more than two weeks, and was set for its worst week in over four months.
The AI trade, one of the biggest engines of last year's rally, is now facing a substantial stress test as money flows into defensive havens such as consumer staples and telecoms. That rotation is unfolding just as risky assets are scaling back, with bitcoin down 50% from its October peak.
The S&P 600 small-cap index and the S&P 400 mid-cap index were both headed for about 1% gains this week.
Elsewhere, Roblox jumped 16.4% after the video game platform forecast fiscal 2026 bookings above Wall Street expectations.
(Reporting by Pranav Kashyap in Bengaluru; Editing by Shilpi Majumdar)
