US Stocks Poised To Lose Momentum As Nasdaq Futures Sink On Disappointing Big Tech Earnings — Focus Now Moves To Ford, Meta

Zinger Key Points
  • Weak results from two FAANG stocks will likely pressure the tech space Wednesday.
  • The RK2 index futures suggest offsetting strength in small-cap stocks.
US Stocks Poised To Lose Momentum As Nasdaq Futures Sink On Disappointing Big Tech Earnings — Focus Now Moves To Ford, Meta

The major U.S. index futures point to a lower open on Wednesday, with tech stocks on track to see marked weakness, following Alphabet, Inc. GOOGL GOOGMicrosoft Corporation MSFT and the likes giving disappointing quarterly reports.

Tuesday, the market extended the upward momentum, encouraged by the earnings news flow, a pullback in bond yields and a few weak economic readings that were seen as strengthening the case for a letup in Fed’s aggressive stance toward interest rates.

All three major averages are now at their highest level in about a month.

Consumer confidence rose less than expected in October and the S&P CoreLogic Case-Shiller’s house price survey showed a deceleration in growth in August.

All but energy stocks advanced in the session, with real estate, material and communication services rallying strongly.

U.S. Indices' Performance On Tuesday
Index Performance (+/-)   Value
Nasdaq Composite +2.25%   11,199.12
S&P 500 Index +1.63%   3,859.11
Dow Industrials +1.07%   31,836.74

Here’s a peek into index futures trading:

U.S. Futures' Performance On Wednesday During Premarket Session
Index Performance (+/-)  
Nasdaq 100 Futures -1.55%  
S&P 500 Futures -0.65%  
Dow Futures -0.08%  
R2K Futures +0.25%  

In premarket trading on Wednesday, the SPDR S&P 500 ETF TrustSPY declined 0.66% to $382.37 and the Invesco QQQ TrustQQQ plunged 1.52% to $279.89, according to Benzinga Pro data.

On the economic front, the Mortgage Bankers Association’s mortgage application volume data is due at 7 a.m. EDT.

The Commerce Department is scheduled to release its new home sales data for September at 10 a.m. ET. Economists, on average, look for a 13.8% month-over-month drop in new home sales for the month.

The Energy Information Administration will release the crude oil inventory report for the week ended Oct. 21 at 10:30 a.m. EDT.

The Bank of Canada is due to announce its rate decision at 10 a.m. EDT, with consensus calling for a 75-basis point hike to a 14-year high of 4% to take on stubbornly high inflation.

See also: Why This Market Analyst Expects Santa Claus Rally To Take S&P 500 Back To August High

Stocks In Focus:

  • Alphabet’s shares sank in premarket trading after its third-quarter results missed expectations and the company hinted at a further slowdown in the December quarter. (Read Why Some Analysts Remain Bullish)
  • Microsoft fell over 6% despite the software giant's quarterly results topping expectations. The weakness could be traced back to weak Cloud results and disappointing forward guidance.
  • Spotify Technology S.A. SPOT dropped about 5.5% after the music streaming service disclosed a wider-than-expected loss for the third quarter.
  • Texas Instruments, Inc. TXN moved down over 5% on earnings.
  • Shares of footwear and apparel retailer Skechers U.S.A, Inc. SKX plunged over 13% on a third-quarter miss.
  • AstraZeneca plc ANZ rallied on positive mid-stage breast cancer drug data.
  • Boeing Company BA, Bristol-Myers Squibb Co. BMY, Kraft Heinz Company KHZ, Norfolk Southern Corp. NSC and General Dynamics Corp. GD are among the notable companies releasing their quarterly results.
  • Ford Motor Co. F and Meta Platforms, Inc. META are among the keenly awaited earnings scheduled to be released after the close.

Commodities, Other Global Equity Markets:

Crude oil futures rose, adding to the moderate upside seen on Tuesday. A barrel of WTI-grade crude oil traded north of $85.60 a barrel.

Stocks in the Asia-Pacific region advanced on Wednesday, taking cues from the positive close on Wall Street overnight and amid profit-taking following the strong sell-off seen in some of the markets. The Indian market remained closed for a public holiday.

The major European market opened Wednesday’s session on a mixed note and saw volatility in early trading. Sentiment continued to be mixed in late-morning deals, as traders digested corporate earnings reports and showed apprehension ahead of Thursday’s European Central Bank’s rate decision.

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