Investing.com — U.S. stock index futures pointed to a lower open on Wall Street on Thursday, with technology giants Meta (NASDAQ:) and Microsoft (NASDAQ:) both lower as an increased outlook for capital spending largely offset positive quarterly earnings.
Futures fell following a negative session on Wall Street, as anxiety over rising yields, an upcoming Federal Reserve meeting and a tight presidential race dented risk appetite. Weak earnings and guidance from some chipmakers also weighed on sentiment. More major tech earnings are due in the coming days, as are a batch of key economic
readings.
By 04:01 ET (08:01 GMT), the contract was down 181 points or 0.4%, had shed 41 points or 0.7%, and dropped 218 points or 1%.
Microsoft, Meta fall on increased expenses outlook
Tech giants Meta and Microsoft both fell more than 3% in aftermarket trade, even as their earnings for the September quarter beat expectations.
But both firms forecast increased expenses on artificial intelligence in the coming quarters, while also missing expectations on other key metrics.
Microsoft forecast slower-than-expected cloud business growth in the current quarter while clocking much higher expenses, especially on AI.
Meta warned of a sharp increase in AI-related spending in the coming year, while user growth was at a slower pace in the September quarter than the prior one.
The showings provided mixed cues to investors about just how much of an earnings driver AI was going to be, especially considering the copious amount of capital expenditure on the technology. They also largely offset positive cues from Goole parent Alphabet (NASDAQ:), which clocked strong growth in its quarterly cloud revenue but did not warn of a drastic increase in costs.
The mixed showings from Meta and Microsoft now put investors on guard over upcoming prints from Apple (NASDAQ:) and Amazon (NASDAQ:), which are due on Thursday.
Beyond the megacap tech earnings, weak showings from some chip stocks- namely AMD (NASDAQ:) and Qorvo (NASDAQ:) – also weighed on overall sentiment.
Election, rate jitters weigh on Wall St
Wall Street indexes fell on Wednesday amid pressure from a spike in Treasury yields, as continued signs of resilience in the U.S. economy spurred increased fears of relatively higher interest rates.
Treasury yields rose sharply on Wednesday after gross domestic product data showed the U.S. economy grew slightly less than expected in the third quarter, but still faster than its peers in the developed world.
ADP nonfarm employment data read much higher than expected for October, signaling a robust labor market, and setting a strong precedent ahead of nonfarm payrolls data on Friday.
Before that, PCE price index data- the Fed’s preferred inflation gauge- is due on Thursday. The Fed is set to meet next week and is widely expected to cut rates by a smaller 25 basis points.