U.S. equity futures were mixed in early Wednesday trading, with Treasury yields creeping higher and the dollar building gains against its global peers as investors reacted to the first wave of mega-cap tech earnings while continuing to track movements in the bond market.
Microsoft (MSFT) – Get Free Report and Google parent Alphabet (GOOGL) – Get Free Report kicked-off this week’s run of earnings from the so-called ‘magnificent seven’ late Tuesday with a mixed set of September quarter results, reflecting both the power for AI technologies to boost near-term profits and the impact of surging interest rates on corporate spending.
Microsoft’s revenue growth in cloud computing, driven in part by its early investments in AI, lifted shares in the tech giant firmly higher in pre-market trading as it looks to add around 85 points to the Dow Jones Industrial Average at the opening bell.
Google, meanwhile, slumped 6.6% following a mixed set of third quarter earnings that showed slowing cloud computing growth overshadowing record ad revenues of $59.65 billion.
Facebook and Instagram owner Meta Platforms (META) – Get Free Report posts its third quarter earnings after the bell later today, with magnificent seven stalwart Amazon (AMZN) – Get Free Report following on Thursday.
In the bond market, a muted auction of $51 billion in 2-year notes yesterday, which drew softer demand from both foreign and domestic investors, drew a line under the recent Treasury market rally, which was also tested by a faster-than-expected reading for business activity by S&P Global over the month of October.
Benchmark 10-year notes yields were last marked 2 basis points higher in the overnight session at 4.868% while 2-year notes were pegged at 5.079%, 2 basis points higher than yesterday’s auction levels, ahead of a $52 billion sale of 5-year notes later in the session.
The U.S. dollar index, meanwhile, was marked 0.11% higher against a basket of six global currency peers and trading at 106.387 heading into the New York session.
In other markets, global oil prices drifted modestly higher in early New York trading ahead of Energy Department data on domestic stockpiles and international exports later this morning.
Brent crude contracts for December delivery were marked 8 cents higher at $88.15 per barrel while WTI contracts for the same month edged 2 cents higher to $83.74 per barrel.
On Wall Street, futures were mixed heading into the start of the trading day, with contracts tied to the S&P 500 indicating a 13 point opening bell decline and those linked to the Dow suggesting a 58 point advance. Nasdaq futures were down 80 points.
In overseas markets, Europe’s Stoxx 600 was marked 0.41% lower in early Frankfurt trading amid another busy earnings session while Britain’s FTSE 100 was little-changed from last night’s 7,389.7 point close.
Overnight in Asia, reports of a new trillion-yuan bond sale from the Chinese government, worth around $137 billion in U.S. dollar terms and aimed at adding further stimulus to the moribund economy, boosted sentiment and helped regional stocks eek out a modest 0.09% gain heading into the close of trading.
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