Nasdaq Index, Dow Jones, S&P 500 News: Tech Stocks Fall on Weak Meta, IBM Earnings Reports

U.S. Stock Market Overview

U.S. stock futures dropped sharply on Thursday, largely driven by disappointing earnings reports from major tech companies. Meta Platforms led the downturn with a 12% fall in premarket trading, marking its largest single-day decline since October 2022, after announcing weaker-than-expected revenue guidance for the upcoming quarter. This news casts a shadow over the tech sector, particularly as other giants like Microsoft and Alphabet are expected to release their earnings later in the day.

At 11:11 GMT, Dow Jones futures are trading 38449.00, down 231.00 or -0.60%. S&P 500 Index futures are at 5071.75, down 35.75 or -0.70% and Nasdaq-100 Index futures are at 17476.00, down 188.50 or -1.07%.

Tech Sector Under Pressure

Meta’s disappointing guidance has heightened concerns across the tech industry, signaling potential volatility as earnings season progresses. Similarly, IBM recorded an 8% drop after its first-quarter revenue fell short of consensus estimates. This collective uncertainty is setting a cautious tone ahead of further earnings announcements from other tech stalwarts.

Mixed Corporate Earnings

In contrast to the tech sector’s struggles, Comcast reported a better-than-expected first quarter, driven by increased broadband revenue despite losing cable customers. The company saw its net income slightly increase, although earnings before interest, taxes, depreciation, and amortization (EBITDA) experienced a slight decline. Notably, Peacock, Comcast’s streaming service, added 3 million paid subscribers, boosting its revenue significantly.

Southwest Airlines reported a wider loss compared to last year, with challenges compounded by ongoing delays in Boeing 737 Max deliveries. This situation is expected to impact the airline’s growth strategy well into 2025. Meanwhile, Merck outperformed expectations with strong sales from its cancer drug, Keytruda, and raised its full-year revenue and earnings forecasts.

Market Forecast

Looking ahead, traders are cautiously monitoring the implications of these mixed corporate results on the broader market. Today’s economic data releases, including the first-quarter U.S. GDP and weekly jobless claims, will further influence market sentiment and the Federal Reserve’s monetary policy decisions. The current environment suggests a bearish outlook for tech stocks in the short term, with potential stability or modest gains in other sectors depending on forthcoming economic indicators and corporate earnings results.

Technical Analysis

E-mini Nasdaq-100 Index futures are sharply lower on Thursday. The early price action made 17795.50 a new minor top. A trade through this level will change the minor trend to up and signal a shift in momentum.

Both the short-term and intermediate trends are also lower, with the long-term uptrend still intact.

The new minor range is 17113.25 to 17795.50. Its pivot is 17454.375. The index is currently testing this level. Trader reaction to it will set the tone for the session.