Following a mostly positive close in the previous session, stocks are poised for a downturn at the start of trading on Wednesday. Currently, the futures for major indexes are indicating a lower opening, with S&P 500 futures declining by 0.4%.
Early losses may be driven by the tech sector, owing to negative investor reactions to earnings reports from Alphabet (GOOGL) and Advanced Micro Devices (AMD).
Alphabet's shares are down 7.6% in pre-market trading despite the company surpassing fourth-quarter earnings expectations; this decline is attributed to their cloud revenue falling short of forecasts.
Similarly, AMD is experiencing a significant 9.9% drop in pre-market value. Despite reporting earnings and revenues above estimates, its data center sales did not meet analyst expectations.
Disney (DIS) is also facing pre-market pressures. While the company beat fiscal first-quarter earnings estimates, it cautioned about a potential "modest decline" in Disney+ subscriber numbers in the upcoming quarter.
Concerns regarding the Federal Reserve possibly maintaining current interest rates for an extended duration could also impact the market. This apprehension heightened after payroll processor ADP reported stronger-than-expected private sector employment growth in January.
ADP noted a rise of 183,000 jobs in January, following an upward revision to 176,000 jobs in December. Economists had anticipated a smaller increase of 150,000 jobs, previously reported as 122,000 for December.
Concurrently, a report from the Commerce Department revealed a significant widening of the U.S. trade deficit in December, driven by a surge in imports and a plunge in exports.
Shortly after Wednesday's market opening, the Institute for Supply Management will publish its January report on service sector activity. Expectations are set for the ISM's services PMI to edge up to 54.3 from December's 54.1, with any reading above 50 indicating growth.
In Tuesday's trading, stocks predominantly rose, recovering much of the previous session's decline. All major averages saw upward movements, with the Nasdaq, heavily weighted toward tech stocks, leading.
By session's end, the major indices were near their highest points for the day. The Nasdaq increased by 262.06 points, or 1.4%, to 19,654.02; the S&P 500 added 43.31 points, or 0.7%, to 6,037.88; and the Dow rose by 134.13 points, or 0.3%, to 44,556.04.
In global markets, the Asia-Pacific region finished Wednesday with mixed results. Japan's Nikkei 225 rose by 0.1%, and South Korea's Kospi surged by 1.1%. In contrast, China's Shanghai Composite Index declined by 0.7%, and Hong Kong's Hang Seng Index dropped by 0.9%.
European markets are also showing mixed trends. The FTSE 100 in the U.K. increased by 0.2%, while Germany's DAX Index slightly dipped below unchanged, and France's CAC 40 Index decreased by 0.2%.
In the commodities market, crude oil futures have dropped by $0.84 to $71.86 per barrel, after previously falling by $0.46 to $72.70 on Tuesday. Meanwhile, gold is trading at $2,889.20 per ounce, a rise of $13.40 from Tuesday's close of $2,875.80. Gold had gained $18.70 in the previous session.
In currency exchanges, the U.S. dollar is trading at 152.96 yen, down from 154.34 yen at Tuesday’s New York close. Against the euro, the dollar stands at $1.0412, compared to $1.0379 on the previous day.
