On Wednesday morning, US equity futures were experiencing downward pressure as traders took their time to evaluate the latest quarterly earnings reports from significant technology players, particularly Alphabet, the parent company of Google, and Tesla, the leading electric vehicle manufacturer. The Dow Jones Industrial Average futures dropped by 0.5%, while the S&P 500 futures decreased by 1.0% and the Nasdaq index futures saw a decline of 1.5%, indicating a cautious sentiment among investors. In its recent earnings release, Alphabet surpassed expectations for Q2 results, although it faced challenges with its YouTube advertising revenue, which fell short of analyst forecasts.
This mixed performance caused Alphabet's stock to slide nearly 5% before the market opened. Contrarily, Tesla's Q2 adjusted earnings also missed the anticipated targets, leading to a significant drop of 9% in its shares before the opening bell. Amid this turbulence in the tech sector, oil prices displayed an upward trend.
The global benchmark for oil, North Sea Brent crude, rose by 0.8%, reaching a price of $81.65 per barrel, while the US West Texas Intermediate crude saw an increase of 1.0% to $77.71 per barrel. Such movements in oil prices suggest ongoing volatility in the energy market, which traders are closely monitoring. In addition to tech earnings, market participants are anticipating key economic data releases.
Specifically, the flash S&P Global Composite Purchasing Managers' Index for July is set to be unveiled at 9:45 am ET, providing insights into economic activity and business sentiment. Furthermore, new home sales data, expected to reflect an annualized rate increase to 639,000 in June from 619,000 in May, will be released at 10 am ET, as estimated by Bloomberg. Globally, other markets are showing signs of distress as well.
Japan's Nikkei finished 1.1% lower, Hong Kong's Hang Seng Index dropped by 0.9%, and China's Shanghai Composite recorded a decline of 0.5%. In Europe, market indices followed suit, with the UK's FTSE 100 slipping by 0.1% and Germany's DAX 30 index falling by 0.7% during the early afternoon session. In terms of individual stock performances, Visa shares experienced a notable decline of 4% following the announcement of fiscal Q3 revenue figures that did not meet analyst expectations.
Conversely, AT&T shares rose by 3.3%, buoyed by the company’s Q2 adjusted profit aligning with analyst projections. Additionally, Pieris Pharmaceuticals saw a remarkable increase of 78% in its stock price after announcing a merger with Palvella Therapeutics in an all-stock transaction. Overall, with earnings season delivering mixed results from major players and economic indicators on the horizon, investors are advised to maintain vigilance and adapt to the evolving market landscape..