Futures fall as Alphabet disappoints
U.S. equity futures slipped early Thursday as investors worked through a fresh batch of results from the largest cloud and AI companies. Nasdaq-100 futures dropped 1.4%, S&P 500 futures lost 0.5%, and Dow futures edged up 0.3%. The split reflected a sharp divergence between two of the biggest technology names reporting this week.[S1]
Alphabet fell 9% in after-hours trading after its third-quarter adjusted earnings per share and revenue came in below expectations. The company also reported negative free cash flow of $9.07 billion and kept its full-year capital expenditure forecast at $195 billion to $205 billion. The results revived concerns about the cost of the artificial intelligence buildout.[S1][S3][S4]
Microsoft moved the other way, rising 3% after hours as growth in its Azure cloud infrastructure business helped the software maker beat estimates on both revenue and profit for its fiscal first quarter, according to LSEG data. The contrast underscored how differently investors are treating spending plans across the hyperscaler group.[S1]
Asia follows Wall Street lower
Asian markets traded mixed to lower, with technology-heavy indexes among the weakest. South Korea's Kospi fell 2.14% and the small-cap Kosdaq dropped 2.75%, while mainland China's CSI 300 declined 1.20%. Japan's Nikkei 225 added 0.42% even as the Topix slipped 0.38%, Australia's S&P/ASX 200 gained 0.46%, and Hong Kong's Hang Seng was roughly flat.[S1][S2][S5]
Weak quarterly reports from Alphabet and Samsung pulled technology shares lower across the region, and several large tech companies have yet to report. On Wednesday, chipmakers had supported the wider U.S. market: Micron Technology gained nearly 6%, Broadcom climbed over 2%, and the Nasdaq Composite finished up 0.3%, its third consecutive advance, matching the S&P 500's rise.[S1][S5]
Fed holds and data ahead
The Federal Reserve left its benchmark rate in a range of 3.75% to 4% on Wednesday, a pause that had been widely anticipated after the central bank raised rates by a quarter point in September. Policymakers described inflation as still elevated but indicated they want more information before acting again.[S1]
Daniel Siluk, who leads global short duration and liquidity at Janus Henderson Investors, described the move as only slightly dovish at the margin. In his view, it reflects patience rather than a shift away from a tightening stance, and officials have left room for further tightening while they await data showing whether additional steps are warranted.[S1]
Investors will get more economic signals Thursday, including the September Personal Consumption Expenditures price index, a gauge the Fed watches closely, along with the first estimate of third-quarter GDP and weekly jobless claims. On the earnings side, Caterpillar and Eli Lilly report in the morning, with Amazon and Intel due after the close.[S1]
