U.S. stock index futures pointed to a stronger opening on Thursday, with investors looking for a rebound after the heavy losses recorded in the previous session.
Technology shares appeared poised to lead the recovery, with Nasdaq 100 futures climbing 1.6% ahead of the opening bell.
Microsoft Strength Offsets Meta Weakness
Buying interest in beaten-down technology stocks may support early trading after the Nasdaq finished Wednesday at its lowest closing level in three months. The Dow Jones Industrial Average and the S&P 500 also ended at their weakest closes in more than a month.
Microsoft (NASDAQ:MSFT) was among the biggest premarket gainers, surging 9.2% after posting quarterly earnings that exceeded expectations, driven by continued strength in its Azure cloud business.
Meta Platforms (NASDAQ:META), however, moved sharply lower, falling 9.7% in premarket trading after issuing weaker-than-expected revenue growth guidance.
“This reporting season has become less about headline results and more about proving that unprecedented AI spending can generate sustainable profitability,” said Daniela Hathorn, Senior Market Analyst at Capital.com.
She added, “With Apple and Amazon still to report, the market’s verdict on the AI investment cycle remains far from settled.”
Wall Street Ends Volatile Session Sharply Lower
Wednesday’s trading session was marked by significant volatility. After recovering from steep morning losses and briefly moving into positive territory during the afternoon, the major indexes reversed course in the final hour of trading.
The Dow Jones Industrial Average dropped 1,153.18 points, or 2.2%, to 51,594.14.
The Nasdaq Composite lost 433.97 points, or 1.7%, to close at 24,442.94, marking its lowest finish in three months.
The S&P 500 declined 112.63 points, or 1.5%, ending the session at 7,316.15, its weakest close in more than a month.
Interest Rate Concerns Pressure Markets
The late-session decline accelerated as Treasury yields climbed in electronic trading despite the Federal Reserve’s decision to leave interest rates unchanged.
The Fed maintained the federal funds target range at 3.5% to 3.75%, marking its fifth consecutive meeting without a policy change.
However, the decision was not unanimous. Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie Logan each voted in favour of increasing rates by 25 basis points.
Oil Prices Jump as Middle East Tensions Escalate
Equities also faced pressure earlier in the session as crude oil prices rebounded sharply.
U.S. crude futures surged more than 6% after falling 14% over the previous three sessions, reflecting renewed concerns about escalating tensions between the United States and Iran.
According to U.S. Central Command, Iran launched multiple ballistic missiles in an attempted surprise attack on U.S. forces stationed in the Middle East on Tuesday, although the missiles were intercepted.
Centcom later said U.S. and Saudi Arabian forces carried out precision strikes against Iran-backed terrorist targets in Iraq after more than 30 drone attacks directed by Iran’s Islamic Revolutionary Guard Corps over the previous 72 hours.
President Donald Trump also warned of a forceful U.S. response, telling a Fox News reporter: “They’re going to get a beating.”
Semiconductor Shares Lead Market Declines
Semiconductor stocks experienced wide swings before ending the session sharply lower.
The Philadelphia Semiconductor Index dropped 5.3%, reaching its lowest closing level in three months.
Housing stocks also came under heavy selling pressure as higher Treasury yields weighed on the sector, sending the Philadelphia Housing Sector Index down 4.3%.
Networking shares weakened significantly, dragging the NYSE Arca Networking Index down 4%.
Computer hardware, airline and banking stocks also posted notable losses, while energy companies outperformed as higher crude oil prices supported the sector.