Investing.com — U.S. stock index futures fell Thursday, weighed by disappointment as technology giants Meta (NASDAQ:) and Microsoft (NASDAQ:) warned about increased capital spending, which offset largely positive quarterly earnings.
By 04:01 ET (08:01 GMT), the contract was down 181 points, or 0.4%, 41 points, or 0.7%, and dropped 218 points, or 1%.
The main Wall Street indices fell Wednesday, as anxiety over rising yields, an upcoming Federal Reserve meeting and a tight presidential race dented risk appetite, as well as the weak guidance from these tech giants.
Microsoft, Meta fall on increased expenses outlook
Tech giants Meta and Microsoft both fell more than 3% in premarket trade, even as their earnings for the September quarter beat expectations.
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.
Earnings from companies including Uber Technologies (NYSE:), Mastercard (NYSE:), Bristol-Myers Squibb (NYSE:) and ConocoPhillips (NYSE:) are due before markets open.
Election, rate jitters weigh
Treasury yields rose sharply on Wednesday after 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.
data read much higher than expected for October, signaling a robust labor market, and setting a strong precedent ahead of data on Friday.
Before that, 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.
Crude boosted by US inventories
Oil prices edged higher Thursday after an unexpected draw in US inventories pointed to strength of demand in the world’s largest crude consumer.
By 06:10 ET, the Brent contract gained 0.4% to $72.42 per barrel, while US crude futures (WTI) traded 0.4% higher at $68.85 a barrel.
Both contracts rose more than 2% on Wednesday, after falling more than 6% earlier in the week on the reduced risk of a wider Middle East conflict.
US gasoline stockpiles fell unexpectedly in the week ending Oct. 25 to a two-year low, according to data from the , while crude inventories also posted a surprise fall.
(Ambar Warrick contributed to this article.)
