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U.S. Stocks May Come Under Pressure On Disappointing Tech Earnings

wallstreet july23 26oct22 lt

Stocks are likely to move to the downside in early trading on Wednesday, giving back ground after moving sharply higher over the three previous sessions.

The major index futures are currently pointing to a lower open for the markets, with the Nasdaq futures showing a particularly steep 1.9 percent slump.

The downward momentum for the tech-heavy Nasdaq comes amid a negative reaction to earnings news from tech giants Microsoft (MSFT) and Alphabet (GOOGL).

Shares of Microsoft are plunging by 6.8 percent in pre-market trading after the software giant reported better than expected fiscal first quarter results but provided disappointing guidance.

Google parent Alphabet is also tumbling by 6.8 percent after reporting third quarter results that missed analyst estimates on both the top and bottom lines.

Meanwhile, shares of Kraft Heinz (KHC) are seeing significant pre-market strength after the food giant reported better than expected third quarter results.

Shortly after the start of trading, the Commerce Department is scheduled to release its report on new home sales in the month of September.

New home sales are expected to plunge by 14.6 percent to an annual rate of 585,000 in September after soaring by 28.8 percent to a rate of 685,000 in August.

Stocks moved sharply higher over the course of the trading day on Tuesday, extending the rally seen over the two preceding sessions. With the continued advance, the major averages all reached their best closing levels in over a month.

The major averages reached new highs in the final hour of trading but gave back some ground going into the close. The Dow jumped 337.12 points or 1.1 percent at 31,836.74, the Nasdaq soared 246.50 points or 2.3 percent to 11,199.12 and the S&P 500 surged 61.77 points or 1.6 percent to 3,859.11.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index climbed by 0.7 percent, while China's Shanghai Composite Index advanced by 0.8 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the German DAX Index is up by 0.1 percent, the French CAC 40 Index is down by 0.3 percent and the U.K.'s FTSE 100 Index is down by 0.6 percent.

In commodities trading, crude oil futures are jumping $1.01 to $86.33 a barrel after climbing $0.74 to $85.32 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,670.40, up $12.40 compared to the previous session's close of $1,658. On Tuesday, gold inched up $3.90.

On the currency front, the U.S. dollar is trading at 147.21 yen compared to the 147.93 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0007 compared to yesterday's $0.9966.

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