U.S. stock futures fell on Wednesday after Alphabet’s disappointing third-quarter results and Microsoft’s weak earnings guidance marked a foreboding start to big tech earnings this week.
S&P 500 and Nasdaq 100 futures were down 0.5% and 1.4%, respectively. Dow Jones Industrial Average futures added 1 point, lifting the Visa index after it reported fourth-quarter earnings that beat expectations on revenue and earnings.
Mercury’s early performance was a reversal from the previous three days of gains in major indices. On Tuesday, the Nasdaq rose 2.2%, while the S&P 500 and Dow gained 1.6% and 1.1%, respectively. Tuesday’s close marked the first time since October that the major indices rose for three days in a row.
Shares of Google-parent Alphabet fell 6% in premarket trading. Online search giant Missed expectations on the top and bottom lines. Alphabet reported a decline in YouTube ad revenue, prompting investors to look at the outlook for other tech companies that rely on ad spending.
Meanwhile, Microsoft later fell about 6% The tech giant’s cloud revenue is weaker than expected Despite beating revenue and earnings estimates in its latest quarterly results. The company also issued current quarter revenue guidance that fell short of expectations.
“I think we have to take a big-picture view, nobody in this market is really immune to the slowdown in digital ad spending,” Sand Hill Global Advisors’ Brenda Vingiello said Tuesday on CNBC’s “Closing Bell: Overtime.”
As investors focused on technology this week, other mega-cap tech stocks fell in after-hours trading, including Alphabet and Microsoft. Shares of MetaPlatforms fell 4%, while Amazon fell 3.8%.
A mixed bag so far, the corporate earnings season continues on Wednesday. Shares of Kraft Heinz rose after beating revenue and earnings per share pre-bell. Among the companies set to report was Meta.
Mortgage applications fell as rate levels continued to dampen demand, according to weekly data released Wednesday. Traders are also looking at the latest economic data on weekly total inventories and new home sales.
Bond yields bounced back from a period of volatile trading.
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