The major U.S. index futures are currently pointing to a lower open on Thursday, with stocks likely to see further downside after coming under pressure late in the previous session.
A negative reaction to earnings news from tech giants Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:META) is likely to weigh on Wall Street early in the session.
Shares of Microsoft are tumbling by 3.6 percent in pre-market trading after the company reported better than expected fiscal first quarter results but provided disappointing revenue guidance for the current quarter.
Facebook parent Meta is also seeing notable pre-market weakness after reporting third quarter earnings that beat estimates but weaker than expected user growth. Meta also forecast an increase in capital spending due to AI investments.
The futures remained firmly negative after the Commerce Department released a report on personal income and spending that includes the Federal Reserve’s preferred inflation readings.
The report said the personal consumption expenditures (PCE) price index rose by 0.2 percent in September after inching up by 0.1 percent in August. The modest increase matched economist estimates.
The annual rate of growth by the PCE price index slowed to 2.1 percent in September from 2.3 percent in August, which was also in line with expectations.
The Commerce Department also said the core PCE price index, which excludes food and energy prices, climbed by 0.3 percent in September after rising by 0.2 percent in August. The increase was also in line with estimates.
Meanwhile, the annual rate of growth by the core PCE price index in September was unchanged from the previous month at 2.7 percent, while economists had expected the pace of growth to slow to 2.6 percent.
With the more closely watched monthly jobs report looming, the Labor Department also released a report showing an unexpected decline by first-time claims for U.S. unemployment benefits in the week ended October 26th.
Stocks showed a lack of direction throughout much of the session on Wednesday but came under pressure in the latter part of the trading day. The major averages spent most of the day bouncing back and forth across the unchanged line before sliding more firmly into negative territory.
After reaching a new record intraday high in early trading, the tech-heavy Nasdaq fell 104.82 points or 0.6 percent to 18,607.93. The S&P 500 also dipped 19.25 points or 0.3 percent to 5,813.67, while the Dow slipped 91.51 points or 0.2 percent to 42,151.54.
The choppy trading seen for most of the trading day came as investors reacted to a mixed batch of corporate earnings and U.S. economic news.
Shares of Alphabet (NASDAQ:GOOGL) jumped by 2.8 percent after the Google parent reported third quarter results that beat analyst estimates on both the top and bottom lines.
Snapchat parent Snap (NYSE:SNAP) also soared by 15.9 percent after reporting better than expected third quarter results and announcing a $500 million stock repurchase program.
Meanwhile, shares of Advanced Micro Devices (NASDAQ:AMD) plunged by 10.6 percent after the chipmaker reported third quarter revenues that beat expectations but provided disappointing fourth quarter revenue guidance.
Dow component Caterpillar (NYSE:CAT) also slumped by 2.1 percent after the construction equipment maker reported weaker than expected third quarter earnings.
On the U.S. economic front, payroll processor ADP released a report showing private sector employment in the U.S. shot up by much more than anticipated in the month of October.
ADP said private sector employment surged by 233,000 jobs in October after jumping by an upwardly revised 159,000 jobs in September.
Economists had expected private sector employment to climb by 115,000 jobs compared to the addition of 143,000 jobs originally reported for the previous month.
However, a separate report released by the Commerce Department showed U.S. economic growth unexpectedly slowed in the third quarter.
The Commerce Department said gross domestic product shot up by 2.8 percent in the third quarter after surging by 3.0 percent in the second quarter. Economists had expected another 3.0 percent jump.
The unexpected slowdown in the pace of GDP growth primarily reflected a downturn in private inventory investment and a larger decrease in residential fixed investment.
Semiconductor stocks pulled back sharply after rallying on Tuesday, dragging the Philadelphia Semiconductor Index down by 3.4 percent.
The steep drop by AMD weighed on the sector along with a nosedive by shares of Qorvo (NASDAQ:QRVO), which plummeted by 27.3 percent after the company provided disappointing fiscal third quarter earnings guidance.
Substantial weakness was also visible among computer hardware stocks, as reflected by the 2.6 percent slump by the NYSE Arca Computer Hardware Index.
Shares of Super Micro Computer (NASDAQ:SMCI) plunged by 32.7 percent after the tech company revealed Ernst & Young has resigned as its auditor.
Telecom, gold and steel stocks also moved notably lower on the day, while some strength remained visible among housing stocks.