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U.S. equity futures moved firmly lower Thursday, while the dollar held steady against its global peers, as investors counted the cost of a big slump in Meta Platforms ahead of another round of Big Tech earnings while eyeing two key data releases prior to the opening bell.
Meta (META) is likely to be the biggest driver of market action at the open, with the $1.25 trillion stock called 13.37% lower in premarket trading following a solid set of first-quarter earnings figures, offset by surging expenses and a muted revenue outlook.
Investor concern that AI investments aren’t leading to corresponding revenue gains in the tech space weighed on shares of Big Six peers Microsoft (MSFT) and Alphabet (GOOG) , which report after the close of trading today, as well as Nvidia (NVDA) and Amazon (AMZN) .
Big Tech giants Google and Microsoft will post March quarter earnings after the closing bell.
IBM (IBM) shares, meanwhile, were marked nearly 9% lower, and set for their biggest opening-bell decline in more than two years, after the tech giant posted mixed first-quarter earnings and unveiled plans to buy cloud-computing group HashiCorp for $6.4 billion.
That’s left the Nasdaq looking at an opening-bell slump of around 165 points, with the S&P 500 called 33 points lower. The Dow Jones Industrial Average, meanwhile, is priced for a 210 point decline.
“The collateral damage form Meta is negative for digital ad companies such as Alphabet, Snap, Pinterest and Roku but the AI-based capex spend is a positive for Semis/Hardware companies such as Nvidia, Vertiv and Supermicro, etc.,” JPMorgan analysts said Thursday. “Interestingly, the Tech misses are seemingly supportive of the rotation to Value with Russel 2000 outperforming pre-market.”
Prior to the start of trading, investors will also navigate the Commerce Department’s first estimate of first quarter GDP growth, which is expected to show the economy grew at a 2.4% pace over the three months ended in March.
Key to the report will be the pace of price increases, which is tabbed at around 3.4%, with economists focused on productivity gains that go along with a growth rate that, while slowing, remains firmly above the Federal Reserve’s so-called neutral pace of inflation of 1.8%.
Benchmark 10-year Treasury note yields were little changed at 4.646% heading into the GDP reading at 8:30 a.m. U.S. Eastern Time. Two-year notes are pegged at 4.929%.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.25% lower at 105.596.
More Wall Street Analysts:
Analyst unveils new Nike price target ahead of big summer for sportsAnalysts weigh in on Google-parent Alphabet’s stock after cloud eventAnalysts revamp Disney stock price target after proxy fight
In overseas markets, Japan’s tech-heavy Nikkei 225 fell 2.19% in Tokyo following Meta’s first-quarter report and conference call, while the regionwide MSCI ex-Japan index was marked 0.37% lower into the close of trading.
In Europe, the Stoxx 600 slipped 0.18% in Frankfurt. Britain’s FTSE 100 rose 0.63% in London and hit an all-time high of 8,102.14 points earlier in the session.
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