U.S. equity futures pushed higher early Thursday, a day after the S&P 500 slid 1.52% and the Dow Jones Industrial Average posted its worst decline since April 2025. The Federal Reserve's decision to leave interest rates unchanged sent long-dated Treasury yields sharply higher, while Microsoft and Meta moved in opposite directions after reporting earnings.
U.S. equity futures rose early Thursday as investors digested the latest Big Tech earnings, the Federal Reserve's decision to hold rates steady, and the resumption of hostilities in the Middle East. S&P 500 futures advanced 0.17%, Dow futures added 67 points, or 0.13%, and Nasdaq 100 futures climbed 0.31%.
The Dow's worst decline since April 2025
In regular trading, the Dow dropped 1,153.18 points, or 2.19%, marking the blue chip index's worst decline since April 2025. The broad market S&P 500 slid 1.52%.
Tech took the heavier hit. The Nasdaq Composite fell 1.74%, ending the session more than 10% off its intraday record. Asia-Pacific markets closed broadly lower on Thursday, with South Korea's Kospi down 1.23%.
Microsoft and Meta split after earnings
Meta lost 7% in extended trading after issuing a soft revenue forecast. Microsoft, by contrast, jumped 8% on surging growth from its Azure business, and the results underscored a widening divergence in how Big Tech's AI strategies are playing out.
Stephen Evans, chief investment officer at Pave Finance, said one company is increasing profits while spending heavily while the other is allowing those costs to eat into its bottom line: "This is ultimately a tale of two AI investment strategies."
Yields climb before the June PCE print
The 30-year Treasury yield soared 9 basis points to above 5.2% Thursday, after hitting its highest level since 2007 the day before. Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute, said the Fed remains patient and in a wait-and-see mode and will keep monitoring how the economy evolves in the coming months.
He added that this leaves the September meeting live as an opportunity for the Fed to act if the incoming data supports it, to appease rising inflation pressures.
Traders now turn to weekly jobless claims and the June personal consumption expenditures price index. The Dow Jones consensus calls for headline inflation to have grown at an annual rate of 3.7%, and, excluding energy and food, to have risen 3.3%. The first reading of the second quarter's real GDP is also due in the morning.
Amazon, Apple and Coinbase are on deck to report after Thursday's close.
Source: CNBC
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