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Dow futures slip after mixed Microsoft, Alphabet results; Fed decision eyed

Published 26/07/2023, 11:56
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Investing.com -- U.S. stock futures edged lower Wednesday, as investors digested earnings from some tech titans and awaited news from the latest Federal Reserve policy-setting meeting.

By 06:30 ET (10:30 GMT), the Dow futures contract was down 80 points, or 0.2%, S&P 500 futures traded 8 points, or 0.2% lower, and Nasdaq 100 futures dropped 45 points, or 0.3%.

The benchmark Wall Street indices closed higher Tuesday, with the blue-chip Dow Jones Industrial Average recording twelve straight winning sessions, gaining nearly 30 points, or 0.1%, amid generally positive earnings and optimism that the Federal Reserve can generate a soft landing for the U.S. economy despite aggressive monetary tightening to combat inflation.

The broad-based S&P 500 also gained 0.3%, after trading at its highest level in more than a year, while the tech-heavy Nasdaq Composite closed 0.6% higher.

Mixed reception for Microsoft, Alphabet earnings

However, this positive streak is under threat Wednesday after mixed results from the dominant tech sector after the close Tuesday.

Alphabet (NASDAQ:GOOGL) stock gained more than 6% premarket after the Google-parent's second-quarter profit impressed with steady demand for its cloud services and a rebound in advertising.

On the other hand, Microsoft (NASDAQ:MSFT) stock fell almost 4% after growth at its key Azure cloud computing division decelerated to 27% during the April to June period as clients moved to rein in expenditures in the face of economic uncertainty.

Additionally, Snap (NYSE:SNAP) stock slumped almost 20% after the photo messaging app owner offered up weaker-than-expected third-quarter guidance as it struggles to compete for advertising dollars.

Meta Platforms next up for tech sector

Meta Platforms (NASDAQ:META) will be the next tech behemoth to post second-quarter earnings after the close Wednesday, with investors keen to hear more from the Facebook owner's new Twitter competitor, called Threads, which gathered 100 million users in its first week.

Other major companies scheduled to release results Wednesday include soft drinks giant Coca-Cola (NYSE:KO), aircraft manufacturer Boeing (NYSE:BA), telecommunications giant AT&T (NYSE:T), fast food chain Chipotle (NYSE:CMG), and toy maker Mattel (NASDAQ:MAT).

Chair Powell in focus as Fed concludes meeting

The Federal Reserve concludes its latest policy meeting later this session, and is widely expected to raise rates another quarter of a percentage point, as it attempts to tame still-elevated inflation.

According to Investing.com's Fed Rate Monitor Tool, there is a more than 98% probability that the rate-setting Federal Open Market Committee will lift the benchmark Fed Funds rate to a range of 5.25% to 5.50%.

Given the perceived near certainty of a hike, the spotlight is likely to be more on what Chair Jerome Powell says during his press conference about the direction of future rate policy.

Crude retreats from three-month highs

Oil prices retreated from three-month highs after industry data showed a rise in U.S. crude stockpiles, suggesting that supplies were not as tight as previously thought in the important American market.

Data from the American Petroleum Institute, released Tuesday, suggested U.S. crude stocks rose by 1.3 million barrels in the past week. Official numbers from the Energy Information Administration will be studied later Wednesday for confirmation.

By 06:30 ET, U.S. crude futures traded 1% lower at $78.83 a barrel, while the Brent contract dropped 1% to $82.42.

Both benchmarks hit their highest levels since April on Tuesday amid concerns over tighter supplies and pledges by Chinese authorities to shore up the world's second-biggest economy and largest crude importer.

Additionally, gold futures rose 0.4% to $1,971.25/oz, while EUR/USD traded 0.2% higher at 1.1075.

(Oliver Gray contributed to this article.)

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