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Good morning. A palpable sense of caution is pervading global markets after Alphabet reported stronger-than-expected second-quarter earnings but raised its capital expenditure forecast, reigniting concerns about the sustainability of the AI investment cycle. Google’s parent delivered its strongest-ever quarter of growth in cloud computing, but said it would spend as much as $205bn this year building out data centres after having already committed $44.9bn in the second quarter alone. Separately, Tesla reported negative free cash flow of $1.1 billion in the second quarter, while its net income fell 5%. Amid a dramatic pivot away from the capital-light operating model that...

Happy hump day. Investors are turning more cautious ahead of this afternoon’s Alphabet earnings release, with the technology group’s results expected to offer some clarity on whether the vast sums poured into artificial intelligence infrastructure are generating returns. Futures on the Nasdaq and S&P 500 are pointing slightly lower after a two-day recovery and the stakes for currency markets are high: the artificial intelligence investment boom has arguably helped insulate the US economy from otherwise negative forces over the past two years, drawing global capital into American markets on a scale that has kept the dollar in overvalued territory for...