U.S. Stocks May See Further Downside In Reaction To Microsoft, Meta Results

After coming under pressure late in the previous session, stocks may see further downside in early trading on Thursday. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.6 percent.

A negative reaction to earnings news from tech giants Microsoft (MSFT) and Meta Platforms (META) is likely to weigh on Wall Street early in the session.

Shares of Microsoft are tumbling by 3.6 percent in pre-market trading after the company reported better than expected fiscal first quarter results but provided disappointing revenue guidance for the current quarter.

Facebook parent Meta is also seeing notable pre-market weakness after reporting third quarter earnings that beat estimates but weaker than expected user growth. Meta also forecast an increase in capital spending due to AI investments.

The futures remained firmly negative after the Commerce Department released a report on personal income and spending that includes the Federal Reserve’s preferred inflation readings.

The report said the personal consumption expenditures (PCE) price index rose by 0.2 percent in September after inching up by 0.1 percent in August. The modest increase matched economist estimates.

The annual rate of growth by the PCE price index slowed to 2.1 percent in September from 2.3 percent in August, which was also in line with expectations.

The Commerce Department also said the core PCE price index, which excludes food and energy prices, climbed by 0.3 percent in September after rising by 0.2 percent in August. The increase was also in line with estimates.

Meanwhile, the annual rate of growth by the core PCE price index in September was unchanged from the previous month at 2.7 percent, while economists had expected the pace of growth to slow to 2.6 percent.

With the more closely watched monthly jobs report looming, the Labor Department also released a report showing an unexpected decline by first-time claims for U.S. unemployment benefits in the week ended October 26th.

The report said initial jobless claims fell to 216,000, a decrease of 12,000 from the previous week’s revised level of 228,000.

Economists had expected jobless claims to inch up to 230,000 from the 227,000 originally reported for the previous week.

With the unexpected decrease, jobless claims dropped to their lowest level since hitting a matching figure in the week ended May 18th.

Stocks showed a lack of direction throughout much of the session on Wednesday but came under pressure in the latter part of the trading day. The major averages spent most of the day bouncing back and forth across the unchanged line before sliding more firmly into negative territory.

After reaching a new record intraday high in early trading, the tech-heavy Nasdaq fell 104.82 points or 0.6 percent to 18,607.93. The S&P 500 also dipped 19.25 points or 0.3 percent to 5,813.67, while the Dow slipped 91.51 points or 0.2 percent to 42,151.54.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Thursday. Japan’s Nikkei 225 Index slid by 0.5 percent and Hong Kong’s Hang Seng Index eased by 0.3 percent, although China’s Shanghai Composite Index bucked the downtrend and rose by 0.4 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index is down by 0.9 percent, the U.K.’s FTSE 100 Index is down by 0.7 percent and the German DAX Index is down by 0.5 percent.

In commodities trading, crude oil futures are rising $0.59 to $69.20 a barrel after jumping $1.40 to $68.61 a barrel on Wednesday. Meanwhile, after climbing $19.70 to $2,800.80 an ounce in the previous session, gold futures are falling $14.20 to $2,786.60 an ounce.

On the currency front, the U.S. dollar is trading at 152.63 yen versus the 153.42 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0884 compared to yesterday’s $1.0856.