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