Software stocks struggle, Google's AI spending, layoffs surge and more in Morning Squawk

This morning, stock futures are trending down as the S&P 500 experienced yet another disappointing session yesterday. Investors are grappling with increasing pressure on software stocks, with industry leaders urging calm amidst concerns about the sector's ability to thrive as artificial intelligence continues to infiltrate enterprise operations. In a recent earnings report, Alphabet, Google's parent company, surpassed Wall Street's expectations for the fourth quarter. While its cloud division performed better than anticipated, YouTube's advertising revenue fell short of forecasts. Notably, Alphabet revealed that its capital expenditures for this year may exceed double its projected total for 2025, reflecting a strong commitment to enhancing its AI infrastructure. Despite these developments, investor sentiment soured, leading to a more than 4% drop in shares during premarket trading this morning. Conversely, companies supplying AI products to Google saw a positive response, with Broadcom—integral to Google’s AI operations—experiencing a rise of up to 6% in after-hours trading following the announcement of Google's ambitious AI spending plan. In labor market news, the Bureau of Labor Statistics is set to release its December Job Openings and Labor Turnover Survey today, albeit delayed due to a brief federal government shutdown. The highly anticipated nonfarm payrolls report for January has also been postponed to next Wednesday, raising concerns as recent labor data indicated a slowdown in job growth. The ADP reported fewer job additions than expected for January, and Challenger, Gray & Christmas revealed that layoffs reached their highest level for the month since 2009, surging by over 200% from December. In a separate political context, President Donald Trump made headlines with comments aimed at Iran's Supreme Leader, suggesting that military action could be on the table unless an agreement on the nuclear program is reached. This rhetoric influenced oil prices, which initially spiked but later fell as traders anticipated upcoming negotiations between the U.S. and Iran. In corporate news, Rivian is banking on its upcoming R2 vehicle to drive profitability. CEO RJ Scaringe provided an early preview of the vehicle, showcasing the company’s future aspirations. As market dynamics shift, investors are urged to stay informed about these developments influencing the financial landscape.