On Wednesday night, U.S. stock futures declined following Meta Platforms’ disappointing quarterly results. The Dow Jones Industrial Average futures, S&P 500 futures, and Nasdaq 100 futures all experienced losses. Meta Platforms saw a 15% drop in extended trading after issuing lower-than-expected revenue guidance for the second quarter. Additionally, International Business Machines fell 8% after missing revenue estimates for the first quarter. These movements came after a day of mixed performance in the stock market, as rising Treasury yields placed pressure on stocks.
Traders are eagerly anticipating the release of key economic data later in the week. The U.S. gross domestic product is set to be released on Thursday morning, with economists predicting a real GDP of 2.4%. Additionally, weekly jobless claims and the personal consumption expenditures price index will provide information on inflation. These data points will play a crucial role in guiding the Federal Reserve’s decisions on interest rate policy. Fed funds futures trading suggests the possibility of a rate cut at the September meeting, according to the CME FedWatch Tool.
Despite the uncertainty surrounding interest rates, iCapital chief investment strategist Anastasia Amoroso believes that strong earnings will continue to support stocks. She believes that even if the Fed decides not to cut rates, the environment remains favorable for stocks due to improved return expectations for investors since April. With several companies set to report earnings before Thursday’s opening bell, including Caterpillar, Honeywell, Northrop Grumman, American Airlines, Comcast, Merck, and Bristol-Myers Squibb, the outlook for the market remains uncertain based on the upcoming economic data and corporate earnings.
Overall, the stock market’s performance in response to Meta Platforms’ results and other major events highlights the volatility and uncertainty currently present in the market. Traders and investors are closely monitoring economic data releases and corporate earnings reports to gain insight into the future direction of stocks. The potential impact of interest rate policies on market performance adds another layer of complexity to the situation. Amidst these challenges, analysts like Anastasia Amoroso remain optimistic about the ability of strong earnings to support stock prices in the coming months despite the ongoing economic uncertainties.
