Investing.com — U.S. stock index futures on Wall Street fell on Thursday as technology giants Meta (NASDAQ:) and Microsoft (NASDAQ:) both fell as expected higher capital spending largely offset positive quarterly profits. , suggesting a decline in sentiment on Wall Street.
Futures fell after trading turned negative on Wall Street as concerns about rising yields, a Federal Reserve meeting and a close presidential election dampened risk appetite. Weak business results and guidelines from some semiconductor manufacturers also weighed on sentiment. More big technology gains are expected to be announced in the coming days, as well as a series of major economic events.
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By 4:01 a.m. ET, the contract was down 181 points, or 0.4%, down 41 points, or 0.7%, and down 218 points, or 1%.
Microsoft, Meta declines due to expected increase in expenses
Tech giants Meta and Microsoft fell more than 3% in aftermarket trading even though their September quarter results beat market expectations.
But while the companies expect spending on artificial intelligence to rise in the coming quarters, they miss out on other key metrics.
Microsoft expects growth in its cloud business to be slower than expected this quarter, while it expects spending, particularly on AI, to increase significantly.
Mehta warned that while the pace of user growth in the September quarter will be slower than in the previous quarter, AI spending will rise sharply next year.
These exhibits provided investors with a variety of hints about how effective AI could be as a revenue driver, especially given the large capital investments in the technology. These also largely offset positive cues from Google’s parent company, Alphabet (NASDAQ:). The company had strong cloud revenue growth for the quarter, but did not warn of a significant increase in costs.
After mixed announcements from Meta and Microsoft, investors are now wary of Apple’s (NASDAQ:) and Amazon’s (NASDAQ:) upcoming publications scheduled for Thursday.
In addition to mega-cap earnings from tech companies, weakness in some semiconductor stocks such as AMD (NASDAQ:) and Qorvo (NASDAQ:) also weighed on overall sentiment.
Election and interest rate worries weigh on Wall Street
Wall Street indexes fell on Wednesday, under pressure from a spike in U.S. Treasury yields, raising concerns that continued signs of U.S. economic recovery could lead to a relative rise in interest rates.
The U.S. economy on Wednesday came after gross domestic product (GDP) data showed the U.S. economy grew slightly less than expected in the third quarter, but still grew at a faster pace than its developed-world peers. Government bond yields soared.
The October ADP nonfarm jobs report was significantly better than expected, indicating a robust labor market and setting a strong precedent ahead of Friday’s nonfarm jobs report.
Before that, PCE Price Index data, the Fed’s preferred inflation measure, is scheduled to be released on Thursday. The Federal Reserve is scheduled to meet next week and is widely expected to cut interest rates by as little as 25 basis points.
