Nasdaq 100, Dow Jones, S&P 500: Stock Futures Dip after Earnings Reports from Ford, Starbucks, and AMD

US Stock Market Highlights

• US stock futures down pre-market
• Bank and energy stocks underperformed
• Ford, Starbucks, and AMD reported earnings

US Stock Market Overview

In early Wednesday pre-market trading, US stock futures are slightly down as investors await the Federal Reserve’s latest policy decision.

Dow Futures are trading at 33752.00, down 0.06%, S&P 500 Futures are at 4133.25, down 0.08%, and NASDAQ Futures are trading at 13163.00, down 0.16%.

Debt Ceiling Worries Weigh on US Stocks

In yesterday’s session, the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all closed lower for the second consecutive trading session, with the Dow dropping 1.08%, the S&P 500 declining 1.16%, and the Nasdaq falling 1.08%.

The decline was attributed to concerns over the US government running out of cash after June 1 without a debt ceiling hike, as well as worries about the economy and another interest rate hike this week. Bank stocks, in particular, underperformed sharply, and energy shares also tumbled due to a 5% drop in oil prices.

Ford, Starbucks Beat Earnings but Shares Drop

After Tuesday’s closing bell, Ford and Starbucks beat analysts’ expectations for their latest quarterly earnings and revenue. However, their stocks declined in after-hours trading. AMD also reported a 9% drop in revenue, causing a 6.43% decline in their shares in after-hours trading.

Ford Reports Better-Than-Expected Q1 Earnings

Ford Motor Company announced better-than-expected first-quarter results, with earnings per share of 63 cents and automotive revenue of $39.09 billion. Despite the positive results, Ford maintained its previous guidance for adjusted earnings and free cash flow for 2023.

The company’s traditional car business, known as Ford Blue, and Ford Pro fleet operations reported profits, which offset the losses from the company’s electric vehicle operations, Model e.

For the first time, Ford is reporting its financial results by business unit instead of region. Ford also announced it would cut the prices of its electric Mustang Mach-E. The positive results come after rival General Motors raised its adjusted earnings and free cash flow expectations for 2023.

Starbucks Beats Earnings Expectations with Strong Sales

In the second quarter, Starbucks exceeded analysts’ predictions for earnings and revenue, fueled by stronger-than-anticipated international sales, especially in China, where same-store sales saw their first increase since the third fiscal quarter of 2021.

The coffee chain reported net income of $908.3 million, or 79 cents per share, up from $674.5 million, or 58 cents per share, in the prior year. Both the U.S. and international markets performed well, with same-store sales rising by 11%, surpassing expectations.

However, the company’s shares dipped 5.6% during after-hours trading, even though it confirmed its full-year forecast of revenue growth between 10% and 12% and adjusted earnings-per-share growth on the lower end of 15% to 20%.

AMD Beats Expectations, Guidance Weak

AMD reported a 9% drop in revenue for the first quarter. However, it still beat Wall Street expectations for earnings and sales. However, the company’s guidance for the current quarter was below expectations. This caused the stock to drop over 3% in extended trading.

AMD’s CEO Lisa Su signaled that the company expects growth in the second half of the year as the PC and server markets strengthen. The company’s client group, which includes sales from PC processors, saw a 65% decrease in sales from the same period last year.

AMD’s data center segment showed slight growth, and the gaming segment saw a slight decline in sales. The results came during a difficult time for chipmakers, with Intel reporting a 36% drop in sales the previous week.

Earnings Reports and Jobs Data in Focus

Companies like CVS Health, Yum Brands, and Spirit AeroSystems will be announcing their earnings results on Wednesday before the stock market opens.

Traders are also interested in the latest ADP jobs report for April. It is expected to show an increase of 133,000 jobs, a decrease from the previous month’s increase of 145,000 jobs.

Additionally, the S&P Global U.S. Services PMI data for April is anticipated to show a reading of 53.7. This would be the same as the previous month.

Finally, the ISM non-manufacturing PMI data for April is expected to show a reading of 51.8, which is higher than the previous month’s reading of 51.2, according to Dow Jones consensus estimates.