U.S. Stocks May Give Back Ground Amid Negative Reaction To Alphabet, AMD Results

After ending the previous session mostly higher, stocks are likely to move back to the downside in early trading on Wednesday. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.4 percent.

Tech stocks may lead an early pullback on Wall Street amid a negative reaction to earnings news from Alphabet (GOOGL) and Advanced Micro Devices (AMD).

Shares of Alphabet are tumbling by 7.6 percent in pre-market trading after the Google parent reported better than expected fourth quarter earnings but its cloud revenues missed estimates.

Chip maker AMD is also plunging by 9.9 percent in pre-market trading after reporting fourth quarter earnings and revenues that beat estimates but its data center sales fell short of expectations.

Shares of Disney (DIS) are also seeing pre-market weakness after the entertainment giant reported better than expected fiscal first quarter earnings but warned it expects a “modest decline” in Disney+ subscribers in the current quarter.

Worries about the Federal Reserve leaving interest rates on hold for a prolonged period may also weigh on stocks after payroll processor ADP released a report showing private sector employment in the U.S. increased by more than expected in the month of January.

ADP said private sector employment climbed by 183,000 jobs in January after rising by an upwardly revised 176,000 jobs in December.

Economists had expected private sector employment to rise by 150,000 jobs compared to the addition of 122,000 jobs originally reported for the previous month.

Meanwhile, a separate report released by the Commerce Department showed the U.S. trade deficit widened significantly in December, as imports surged and exports plunged.

Not long after the start of trading, the Institute for Supply Management is scheduled to release its report on service sector activity in the month of January. The ISM’s services PMI is expected to inch up to 54.3 in January after rising to 54.1 in December, with a reading above 50 indicating growth.

Stocks moved mostly higher during trading on Tuesday, largely offsetting the weakness seen in the previous session. The major averages all moved to the upside on the day, with the tech-heavy Nasdaq leading the charge.

The major averages finished the session just off their best levels of the day. The Nasdaq jumped 262.06 points or 1.4 percent to 19,654.02, the S&P 500 climbed 43.31 points or 0.7 percent to 6,037.88 and the Dow rose 134.13 points or 0.3 percent to 44,556.04.

In overseas trading, stock markets across the Asia-Pacific region ended mixed on Wednesday. Japan’s Nikkei 225 Inched up by 0.1 percent and South Korea’s Kospi jumped by 1.1 percent, while China’s Shanghai Composite Index fell by 0.7 percent and Hong Kong’s Hang Seng Index slid by 0.9 percent.

The major European markets are also turning in a mixed performance on the day. While the U.K.’s FTSE 100 Index is up by 0.2 percent, the German DAX Index is just below the unchanged line and the French CAC 40 Index is down by 0.2 percent.

In commodities trading, crude oil futures are sliding $0.84 to $71.86 a barrel after falling $0.46 to $72.70 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $2,889.20, up $13.40 compared to the previous session’s close of $2,875.80. On Tuesday, gold climbed $18.70.

On the currency front, the U.S. dollar is trading at 152.96 yen compared to the 154.34 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0412 compared to yesterday’s $1.0379.

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