U.S. stock futures edged lower Thursday, with Wall Street poised for a cautious open after a volatile previous session and a mixed batch of tech earnings. Investors were also digesting the Federal Reserve’s latest rate decision and remarks from Chair Jerome Powell, which tempered hopes for another rate cut this year.
Tech Sector Drags Futures Lower
Major index futures pointed to early weakness: the Dow, S&P 500, and Nasdaq 100 were all slightly in the red before the opening bell. A series of mixed quarterly reports from high-profile technology names weighed on risk appetite.
Meta Platforms (NASDAQ:META) tumbled nearly 10% premarket, despite beating third-quarter estimates, after the social media company warned it expects a rise in AI-related spending.
Microsoft (NASDAQ:MSFT) also slipped, with shares under pressure following strong earnings but guidance that capital expenditure will accelerate this fiscal year.
In contrast, Alphabet (NASDAQ:GOOGL) jumped 7.9% after its parent company Google posted results that topped forecasts on both revenue and profit.
Among other corporate movers, Eli Lilly (NYSE:LLY) looked set for a positive start after reporting stronger-than-expected third-quarter earnings and raising its full-year revenue forecast.
Trump-Xi Talks Offer Limited Boost
Some geopolitical optimism helped limit early declines after a much-anticipated meeting between President Donald Trump and China’s Xi Jinping concluded with modest progress.
Trump described the discussions as productive, confirming that Washington will lower fentanyl-related tariffs on Chinese goods to 10% from 20%, while Beijing will resume purchases of U.S. soybeans and pause new export restrictions on rare earth minerals.
In return, the U.S. will suspend its 50% penetration rule on export controls.
Fed Cuts Rates, But Powell Strikes Cautious Tone
Wednesday’s rally in tech stocks gave way to late-session volatility after the Federal Reserve delivered its expected 25-basis-point rate cut, bringing the federal funds rate to a 3.75%–4.00% range.
However, Powell’s post-meeting remarks dampened expectations for another move in December. He said a further reduction is “not a foregone conclusion,” emphasizing that officials held “strongly differing views about how to proceed” and citing the government shutdown’s delay in economic data as a major source of uncertainty.
The cautious tone prompted traders to scale back bets on additional easing. The CME FedWatch Tool now shows a 34.1% probability that rates remain unchanged in December, up sharply from 9.1% a day earlier.
Recap: A Volatile Wednesday
Markets swung sharply late Wednesday, with the Nasdaq Composite gaining 0.6% to close at a record 23,958.47, supported by strength in computer hardware and semiconductor stocks.
The S&P 500 ended flat at 6,890.59, while the Dow Jones Industrial Average fell 0.2% to 47,632.00.
Traders looked past Powell’s comments to focus on upcoming corporate earnings from other major tech firms, keeping momentum alive in select growth sectors.
Sector Snapshot: Tech Shines, Property Lags
Technology stocks continued to dominate, with the NYSE Arca Computer Hardware Index climbing 6.3% to a record close, driven by a 19% surge in Seagate Technology (NASDAQ:STX) after strong quarterly earnings.
Energy names also rallied, with the Philadelphia Oil Service Index up 2.6% as crude prices rebounded.
However, interest rate-sensitive sectors suffered: the Dow Jones U.S. Real Estate Index fell 2.6%, the Philadelphia Housing Sector Index lost 2.3%, and airlines declined 1.4% amid softer travel demand.
With investors balancing rate expectations, earnings momentum, and renewed U.S.-China dialogue, Thursday’s session looks set to open cautiously as markets seek direction.
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