Market Update: U.S. Equity Futures and Earnings Reports
Late Wednesday, U.S. equity futures saw a decline as investors took in the latest hyperscaler earnings reports. Specifically, Nasdaq-100 futures fell by 1.2%, while S&P 500 futures dropped 0.5%.
Over in Asia, Japan’s Nikkei 225 managed to gain more than 0.49%, but the Topix index saw a slight decline of 0.16%. The Kospi witnessed a significant drop of 2.44%, and the smaller Kosdaq fared worse with a 3.43% fall. Australia’s S&P/ASX 200 rose by 0.34%, while Hong Kong’s Hang Seng index increased by 0.24%, contrasting with a 0.64% dip in mainland China’s CSI 300.
In after-hours trading, Microsoft shares went up by 3% following a strong performance in its Azure cloud infrastructure business that exceeded expectations for the fiscal first quarter, according to LSEG. This is a stark contrast to Alphabet, which saw a 9% decline after its adjusted earnings per share and revenue fell short of expectations in the third quarter, alongside a notably negative free cash flow of $9.07 billion. The company maintained its full-year capital expenditure projections between $195 billion and $205 billion.
These results emerge amid an ongoing focus on the artificial intelligence sector. Stocks in this realm, including the iShares Semiconductor ETF (SOXX) and the Roundhill Memory ETF (DRAM), have had a rough October but have shown some signs of recovery recently.
The broader market got a boost, particularly during regular trading on Wednesday, as the S&P 500 climbed for the third consecutive day. This uptick was fueled by advancements in tech stocks, with Micron Technology rising nearly 6% and Broadcom increasing by over 2%. The tech-heavy Nasdaq Composite also saw a small gain, moving up by 0.3%.
Earlier in the day, the Federal Reserve opted to keep interest rates steady, maintaining them in the 3.75% to 4% range. This decision was anticipated after the Fed raised rates by a quarter percentage point in September.
During the announcement, Fed officials noted that inflation remains high but emphasized the need for more data before proceeding with any additional changes. “This can be seen as a mildly dovish stance, but it’s more about showing patience rather than a definitive shift away from tightening,” commented Daniel Siluk, head of global short duration and liquidity at Janus Henderson Investors. He mentioned that while the possibility for further tightening is still there, the Committee seems inclined to wait for more information before acting.
On Thursday, traders will look for further economic insights from the release of the Personal Consumption Expenditures price index report for September, a key inflation measure for the Fed. Additionally, the first reading of the third-quarter GDP and weekly jobless claims reports will also be released.
In the earnings arena, attention will turn towards quarterly reports from companies like Caterpillar and Eli Lilly in the morning, with Amazon and Intel set to share their numbers after the market closes.
