US stocks slide after mixed tech earnings, but is a rally ahead?
US equity-index futures dropped after Microsoft Corp. and Google’s parent Alphabet Inc. delivered a mixed picture of big tech earnings.
Contracts on the Nasdaq 100 sank 0.6% and those on the S&P 500 were down 0.4%. Alphabet fell more than 7% in premarket trading after its cloud unit reported a smaller than expected profit. Microsoft, on the other hand, climbed after results in its cloud business beat expectations. Meanwhile, Texas Instruments Inc. dropped after a disappointing revenue forecast suggested that demand remains sluggish for a broad range of electronic components.
With earnings season in full swing, investors are looking for evidence on how companies are coping with high interest rates and whether consumer spending is changing because of inflation. Meta Platforms Inc., the parent company of Instagram and Facebook, is set to report later Wednesday, with Amazon.com Inc due Thursday.
“Tech earnings got off to a mixed start thanks to a focus on cloud computing, one of the big money spinners for the sector,” said Chris Beauchamp, chief market analyst at IG Group. “It’s now up to Meta tonight and Amazon tomorrow to provide the kind of good news that might give stocks a reason to rally into month-end.”
Europe’s stock benchmark was also weaker as earnings from some of the region’s biggest consumer-facing companies stoked concerns that a global economic slowdown is hurting corporate profits.
Kering SA slid after the Gucci owner reported a drop in sales amid a global slowdown in luxury, while home products company Reckitt Benckiser Group Plc fell after sales missed expectations. Worldline SA plunged more than 50%, the most ever, after the French payment company lowered its outlook for this year. Peer Nexi SpA slumped
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