U.S. stock-index futures were mostly higher after better-than-expected third quarter economic growth data on Thursday, but the technology sector was likely to see a weaker start after Meta Platforms Inc. released disappointing results while traders nervously awaited earnings from Apple and Amazon.
How are stock-index futures trading
-
S&P 500 futures
ES00,
+0.06%
were up 10.25 points, or 0.3%, at 3,853.20. -
Dow Jones Industrial Average futures
YM00,
+0.81%
rose 320 points, or 1%, to 32,083 -
Nasdaq 100 futures
NQ00,
-0.43%
fell 24 points, or 0.2%, to 11,426.
On Wednesday, the Dow
DJIA,
eked out a tiny gain to extend a win streak to four sessions, while the S&P 500
SPX,
fell 0.7% and the Nasdaq Composite
COMP,
dropped 2%. The Nasdaq Composite is up 6.3% from its 2022 closing low hit on Oct. 14, but remains down 29.9% for the year to date.
What’s driving markets
Stock futures got a lift after the first estimate of third-quarter GDP came in 2.6% higher on an annual basis, and above the 2.3% gain economists expected. Other data showed durable goods orders rising 0.4% in September. The latest weekly initial jobless claims data showed a 3,000 gain to 217,000.
Just ahead of that data, the European Central Bank announced a widely expected interest-rate rise of 75 basis points to 1.5% as expected on Thursday. Investors will now wait for the press conference with President Christine Lagarde, due to begin at 8:45 a.m. Eastern. The dollar hovered around parity with the euro
EURUSD,
But investors have had their attention distracted Thursday by the latest gloomy set of earnings on the tech front.
Big Tech was supposed to be the place that provided investors with some safety during an economic slowdown, but traders have learned that the high valuations these companies were afforded have made them very vulnerable to any indication of cyclical difficulties.
Need to Know: Why the rout for big tech companies may just be getting started
After Microsoft Corp.
MSFT,
and Alphabet Inc.
GOOG,
earnings disappointed late on Tuesday, Meta’s
META,
attempted transformation to a metaverse platform was not well received by the market.
Shares in the company formerly known as Facebook were set to open Thursday’s session down 20%, trading just above $100 and near a 7-year trough.
It’s left investors nervously eyeing the earnings of Apple Inc.
AAPL,
and Amazon.com Inc.
AMZN,
due after the close.
Read: Apple earnings: What do the iPhone production reports really mean?
“Realization has dawned that the might of big tech is not immune to the slowdown. Hopes that resilience would burn brightly through this U.S. earnings season have dimmed,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
However, Mark Newton, technical strategist at Fundstrat, saw the positive in the latest market action. “The important takeaway for all investors Wednesday focused on stock indices being able to rally sharply off the lows despite poor Tech earnings as rates followed through further to the downside,” he wrote in a note to clients.
“That’s an important point…it shows us all that markets are focusing more on interest rate changes (and should eventually focus on declining inflation) more than negative earnings,” Newton added.
The Federal Reserve is expected to raise its benchmark interest rate by 75 basis points to a range of 3.75% to 4% after its meeting next week, but recent soft U.S. economic data have built hopes that the central bank may decelerate its pace of tightening thereafter — a perception that has helped the S&P 500 index climb 7.1% through Wednesday off its 2022 low set two weeks ago.
Companies in focus
-
Shares of Shopify Technology Inc.
SHOP,
-2.58%
rose in premarket trade after the e-commerce company notched a smaller loss than anticipated and forecast that its operating-expense growth rate will fall sequentially in the current quarter. -
Comcast Corp.
CMCSA,
-0.19%
shares rose 7% after the company added net new internet subscribers amid what’s been a tough recent backdrop for growth. The 10,000 net subscriber gains in its residential broadband business and 5,000 net gains in its business broadband business came after Comcast posted a net of no new internet subscribers in aggregate during the second quarter. -
Shares of Dow component Caterpillar Inc.
CAT,
+1.09%
rose over 3% after the construction and mining equipment maker topped estimates for the third quarter. -
McDonald’s Corp.
MCD,
+0.34%
shares were on the rise after the fast-food giant and Dow component blew past estimates for the third quarter. -
Shares of Keurig Dr. Pepper Inc.
KDP,
+0.54%
fell after the company’s third-quarter earnings fell sharply from the year earlier as inflationary pressures weighed.
Barbara Kollmeyer contributed to this report.
