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U.S. stock futures fell on Wednesday after results from tech behemoths Microsoft and Alphabet disappointed investors.
How are stock-index futures trading
-
S&P 500 futures
ES00
dipped 29 points, or 0.8% to 3841 -
Dow Jones Industrial Average futures
YM00
slipped 31 points, or 0.1% to 31,847 -
Nasdaq 100 futures
NQ00
eased 200 points, or 1.8% to 11,513
On Tuesday, the Dow Jones Industrial Average
DJIA
rose 337 points, or 1.07%, to 31837, the S&P 500
SPX
increased 62 points, or 1.63%, to 3859, and the Nasdaq Composite
COMP
gained 247 points, or 2.25%, to 11199. The S&P 500 is up 7.6% so far in October, but remains down 19% for the year-to-date.
What’s driving markets
Stocks were on course to snap a three-day winning streak after poorly-received earnings reports from Microsoft
MSFT,
Alphabet
GOOG
and Texas Instruments
TXN
poured cold water on bulls’ new-found optimism. All three shares were trading at least 6% lower in premarket trading.
The S&P 500 has jumped 5.3% since Thursday’s close as a generally positive third quarter earnings season, and hopes the Federal Reserve may be less aggressive in hiking rates after some weak economic data, sparked another burst of risk appetite.
“The latest data was good for inflation expectations, and good for recession fears, which both temper the Fed hawks a week before the Fed is preparing to announce another 75 basis point hike in its rates,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
Ian Williams, analyst at Peel Hunt, agreed. “Most of the earnings news released in the past 24 hours provided reassurance in the face of the economic downturn, and a pullback in yields also helped equity market sentiment yesterday,” he said.
Disappointing Alphabet and Microsoft numbers hit after the close Tuesday, alongside equally gloomy results from Texas Instrument.
“With its chips used across a variety of goods, the [T.I.] CEO’s comments about weakness in both personal electronics and industrial sectors is telling about demand in the broader economy,” said analysts at Deutsche Bank.
Attention will next turn to results from Meta
META,
due after the market close, and then Apple
AAPL
and Amazon.com
AMZN
on Thursday.
Helping to alleviated losses in the broader indices is the continued slide on Wednesday in bond yields
BX:TMUBMUSD10Y
and the dollar
DXY.
In U.S. economic data, the trade deficit in goods widened 5.7% in September to $92.2 billion as a strong dollar hindered exports.
Companies in focus
-
Visa Inc.
V
shares rose 1.5% in premarket trading Wednesday, after the company topped earnings expectations for its latest quarter Tuesday. Payments volume at grew 10% in the fiscal fourth quarter, while processed transactions increased 12%. Visa’s revenue rose to $7.79 billion from $6.56 billion and came in ahead of the FactSet consensus, which was for $7.55 billion. -
Chipotle Mexican Grill Inc.
CMG
shared dipped 1.5% Wednesday after the restaurant chain on Tuesday reported continued growth, with third-quarter profit beating analysts’ expectations, though its price increases have caused lower-income customers to pull back. -
Skechers USA Inc.
SKX
shares dropped 12.5% in premarket trading Wednesday after the maker of sneakers missed profit expectations for its latest quarter and delivered an outlook that came in below the consensus view. The company reported third-quarter net earnings of $85.9 million, or 55 cents a share, down from $103.1 million, or 66 cents a share, in the year-earlier quarter.
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