U.S. stock futures fell Wednesday after disappointing third-quarter results from Alphabet and weak revenue guidance from Microsoft marked a foreboding start to Big Tech earnings this week.
Dow Jones Industrial Average futures fell by 15 points, or 0.1%. S&P 500 and Nasdaq 100 futures declined 0.6% and 1.6%, respectively.
Wednesday’s early performance is a turn from the past three days of the major indexes rising. On Tuesday, the Nasdaq ended up 2.2%, while the S&P 500 and Dow added 1.6% and 1.1% higher, respectively. Tuesday’s close marked the first time in October the major indexes rallied three days in a row.
Shares of Google-parent Alphabet dropped 6% in the premarket. The online search giant missed expectations on the top and bottom lines. Alphabet also reported a decline in YouTube ad revenue, which spurred investors to deliberate the outlook for other tech companies that rely on ad spending.
Meanwhile, Microsoft declined about 6% after the tech giant reported weaker-than-expected cloud revenue in its latest quarterly results, despite beating earnings and revenue estimates. The company also issued current-quarter revenue guidance that fell short of expectations.
“I think we have to take a big picture perspective and recognize that no one’s really immune in this market, there is a slowdown in digital ad spend,” Sand Hill Global Advisors’ Brenda Vingiello said Tuesday on CNBC’s “Closing Bell: Overtime.”
Other mega-cap tech stocks declined in after hours trading on the back of Alphabet and Microsoft as investors focus in on tech this week. Shares of Meta Platforms fell 4%, and Amazon slipped 3.8%.
A mixed bag so far, corporate earnings season continues Wednesday. Kraft Heinz shares rose after the company reported beating revenue and earnings per share expectations before the bell. Meta was among the companies also set to report.
Mortgage applications decreased as rate levels continued to depress demand, according to weekly data released Wednesday. Traders are also watching for the latest economic data on weekly wholesale inventories and new home sales.
Bond yields continued to retreat coming of a period of volatile trading.