U.S. stock futures point lower after tech earnings disappoint

U.S. stock futures fell on Wednesday after disappointing quarterly results from tech groups Alphabet and Microsoft, both of which reported slower revenue growth in core businesses.

Google’s parent company Alphabet reported a serious problem a slowdown in the search advertising business, sending its shares down 6.1 percent in premarket trading. Microsoft shares fell 5.3% after the company warned that cloud computing revenue growth had slowed. Meta shares were trading 3.5% lower ahead of the open in New York after reporting on Wednesday.

Contracts tracking Wall Street’s broad S&P 500 index fell 0.7 percent on Wednesday, while contracts tracking the Nasdaq 100 technology index fell 1.4 percent. Investors are looking for signs that high inflation and slowing economic growth have begun to weigh on earnings and the outlook.

In Europe, the Stoxx Europe 600 regional index rose 0.3%, while Germany’s Dax added 0.6%. The moves came after Deutsche Bank, the country’s biggest lender, reported its highest level yet pre-tax profit for the third quarter since before the financial crisis, including thanks to rising interest rates.

The European Central Bank meets on Thursday and is expected to raise borrowing costs by 75 basis points for a second month in a row to 1.5 percent to tame inflation that hit 10 percent in the year to September.

The ECB warned on Wednesday that tighter monetary policy and falling consumer confidence had contributed to a sharp drop in demand for home loans. However, demand for corporate loans rose over the same period as companies struggled with rising costs and falling demand.

However, Gergely Mayoras, a member of the investment committee of Carmignac, said falling natural gas prices in Europe and hopes that the US Federal Reserve and ECB could begin raising rates at a slower pace in the fourth quarter and into the new year meant that “short-term investor fears have eased significantly.”

Markets appear to have reached an “inflection point,” Mayoras said, adding that Carmignac had recently increased its exposure to equity and European fixed-income markets. “We’re not at full speed yet, but it’s a change from the sensible stance we’ve taken over the last few months.”

London’s FTSE 100 fell 0.3 percent in morning trade. The 10-year gilt yield rose 0.04 percentage point to 3.69 percent, reflecting the fall in prices, while the 30-year gilt yield rose 0.1 percentage point to 3.79 percent, close to the level that was last observed before the announcement of the “mini” budget. previous British Prime Minister Liz Truss in late September.

Sterling added 1.1% to the dollar to $1.16 in morning trade and 0.4% to the euro to 1.155 euros. One euro was bought for 86.5 pence.

Shares in Asia recovered, indices in Japan, Hong Kong and China rose on Wednesday.