Futures tied to the tech-heavy NASDAQ fell Wednesday after a pair of megacap tech companies posted their quarterly results. Wall Street also looked toward the Federal Reserve's decision on rate policy.
Futures for the Dow Jones Industrials index gained 25 points, or 0.1%, to 38,637.
Futures for the S&P 500 fell 21.75 points, or 0.4%, at 4,929.25.
Futures for the NASDAQ staggered 163 points, or 0.5%, to 17,425.50.
In after-hours trading, shares of Alphabet dropped more than 5%, while Microsoft slipped 1.6% after the tech giants posted quarterly earnings.
To be sure, both companies managed to beat on both top and bottom lines. However, ad revenue for Alphabet came short of analysts' expectations.
The pullback in Alphabet and Microsoft shares, despite the companies' largely positive results, may be more of a short term, “buy on rumors, sell on news information” trend, according to one expert.
The tech sector — which has powered the market rally from 2023 into 2024 — is now trading at a relatively high valuation of nearly 29 times its 2024 earnings. With this in mind, investors will need to see earnings expansion in order for the tech companies to be able to maintain their elevated price-to-book levels.
The Fed's rate decision will be front of mind for traders on Wednesday. The fed funds futures market has priced in a nearly 98% probability that the central bank will leave rates unchanged, according to the CME FedWatch tool. Investors will be looking for clues on shifts in the central bank's policy stance in its post-meeting statement and in Fed Chair Jerome Powell's remarks.
In Japan, the Nikkei 225 picked up 0.6% Wednesday, while in Hong Kong, the Hang Seng Index faded 1.4%.
Oil prices lost $1.14 to $76.68 U.S. a barrel.
Gold prices brightened $4.80 to $2,055.70 U.S. an ounce.