U.S. stock futures fell on Wednesday after Alphabet’s disappointing third-quarter results and Microsoft’s weak revenue forecast marked a worrying start to Big Tech’s earnings this week.
Dow Jones Industrial Average futures fell 49 points, or 0.2%. S&P 500 and Nasdaq 100 futures fell 0.7% and 1.6%, respectively.
Shares of Alphabet, Google’s parent company, fell 6% premarket. The online search giant missed expectations on the top and bottom lines. Alphabet also reported a decline in YouTube ad revenue, prompting investors to ponder the prospects of other tech companies that rely on ad spend.
“I think we need to take a big picture perspective and recognize that no one is really immune in this market, there is a slowdown in digital ad spend,” Brenda Vingiello of Sand Hill Global Advisors said Tuesday on CNBC’s “Closing Bell: Overtime”.
Other mega-cap tech stocks fell after hours trading on the back of the report. Shares of Meta Platforms fell 4.1% and Amazon fell 2%.
Meanwhile, Microsoft was down about 6% after the tech giant reported weaker-than-expected cloud revenue in its latest quarterly results, despite higher earnings and revenue estimates. The company also released revenue guidance for the current quarter that fell short of expectations.
The earnings season continues on Wednesday, with Boeing, Kraft Heinz and Meta among the companies expected to report.
Traders are also watching the latest economic data on weekly mortgage applications, wholesale inventories and new home sales.
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