Tesla shares fell on Wall Street after the electric vehicle maker reported quarterly results that missed analyst expectations, adding to pressure on technology stocks as investors also assessed Alphabet's rising artificial intelligence spending and a jump in oil prices.

Tesla's automotive revenue came in below forecasts, profit margins narrowed, and heavy spending on artificial intelligence and research weighed on the bottom line. The margin compression reflects a broader challenge for Tesla, which has relied on repeated price cuts across its model lineup to sustain delivery volumes amid intensifying competition from both established automakers and newer EV entrants, particularly in China. Management emphasized the company's longer-term plans for autonomous driving and AI, but attention remained on the slowing core car business. The stock sold off sharply following the results.

Alphabet Beats Forecasts, but AI Costs Draw Attention

Alphabet reported earnings that exceeded expectations, supported by growth at Google Cloud and steady advertising revenue. Google Cloud has steadily gained traction as enterprises migrate workloads and adopt AI-powered services, positioning it as Alphabet's key growth engine outside its dominant advertising business. The results were stronger than forecast, but investor focus quickly shifted from revenue and profit to spending.

Management confirmed that capital expenditures will continue to rise as the company invests heavily in AI infrastructure. Much of that spending is directed toward data-centre capacity, including Nvidia's graphics processing units, which have become the foundational hardware for training large AI models. The central question for investors is when those investments will begin to generate returns at a scale that justifies the cost.

The report highlighted a broader theme for the current earnings season: large technology companies are being judged not only on what they earn, but also on how much they are spending to support artificial intelligence development and infrastructure. Thus far, Nvidia has been the clearest financial beneficiary of this buildout, while companies further down the AI value chain are still working to demonstrate proportional returns.

Brent Crude Rises Above $100

Brent crude climbed above $100 per barrel for the first time in months, with the move driven by rising geopolitical tensions in the Middle East. Markets were closely watching the Strait of Hormuz for any signs of potential supply disruption. The narrow waterway between Iran and Oman handles roughly one-fifth of global oil consumption, making it one of the most strategically important energy chokepoints in the world.

Higher oil prices directly affect transportation and manufacturing costs, increasing pressure on both businesses and consumers. For investors, the wider concern is the impact elevated energy prices could have on inflation, which had been cooling steadily after the Federal Reserve's aggressive rate-hiking cycle.

If oil prices remain high, the Federal Reserve may delay cutting interest rates, which would add further pressure to equity markets.

Wall Street declined broadly, with technology shares leading losses. Investors reduced exposure to highly valued growth stocks after mixed signals from Tesla and Alphabet, while rising oil prices added another source of concern for the market.

Intel Earnings Move Into Focus

With Tesla and Alphabet results now released, investor attention is turning to Intel. The chipmaker is scheduled to report earnings after the market closes.

Intel faces pressure to show tangible progress in artificial intelligence, its foundry business, and its broader turnaround strategy. The company has invested heavily in becoming a contract manufacturer for other chip designers, aiming to compete with Taiwan Semiconductor Manufacturing Co. and Samsung in a market central to global semiconductor supply chains. Competition in the semiconductor industry remains intense.

Investors will be watching demand for data-centre processors, manufacturing updates, and the company's outlook for AI-related growth. The results could affect sentiment across the chip sector, including companies such as Nvidia, AMD, and Broadcom.

Intel's report will provide another test of whether corporate spending on artificial intelligence is translating into measurable business progress.