Nasdaq-100 futures declined by 1.06% early Thursday as investors processed the most recent earnings reports from hyperscalers. Dow Jones futures increased by 0.19%, whereas futures associated with the broad-based S&P 500 experienced a rise of 0.28%. Alphabet experienced a decline of 10.38% in premarket trading following its failure to meet expectations regarding adjusted earnings per share and revenue for the third quarter. The parent company of Google reported a negative free cash flow amounting to $9.07 billion. The company maintained its full-year capital expenditures forecast within the range of $195 billion to $205 billion.
In contrast, Microsoft experienced an increase of 3.73% in premarket trading, following growth in the software giant’s Azure cloud infrastructure business, which contributed to surpassing expectations on both revenue and earnings in the fiscal first quarter, according to LSEG. Neoclouds declined as Microsoft’s capital expenditures figure, which fell short of expectations, indicated that infrastructure partners are experiencing delays in delivering data center capacity. The results emerge amidst heightened attention on the artificial intelligence sector. AI stocks, including the iShares Semiconductor ETF and the Roundhill Memory ETF, have experienced a challenging period for the majority of October, but have shown signs of recovery in recent days.
Chips contributed to the broader market’s positive performance during Wednesday’s regular session, with the S&P 500 experiencing its third consecutive day of gains as Micron Technology surged nearly 6% and Broadcom increased by over 2%. The tech-heavy Nasdaq Composite also recorded a modest increase, rising by 0.3%. Earlier Wednesday, the Federal Reserve opted to maintain its current stance on interest rates, keeping the central bank’s benchmark rate within a range of 3.75% to 4%. The decision to maintain the current stance was largely anticipated following the Federal Open Market Committee’s implementation of a quarter-percentage-point increase in September. This time, central bank policymakers pointed out that inflation “remains elevated,” but also said that it was awaiting the “accumulation of more information” before it takes further steps.
The Fed’s decision “can be interpreted as mildly dovish at the margin, but we think it is better viewed as an expression of patience rather than a shift away from a tightening bias,” said Daniel Siluk. “The door remains open to further tightening, but the Committee appears willing to wait for incoming data to validate the need for additional action.” On Thursday, traders will gain additional insights into the economy with the release of the Personal Consumption Expenditures price index report for September. The PCE serves as a favoured measure of inflation for the Federal Reserve. The initial estimate of third-quarter GDP and the latest figures on weekly jobless claims are forthcoming. On the earnings front, attention will be focused on quarterly reports from Caterpillar and Eli Lilly in the morning, followed by Amazon and Intel after the market close.
