Nasdaq futures fell over 1% on Thursday as megacap shares remained under pressure with investors taking stock of recent Big Tech earnings and elevated Treasury yields, while keeping an eye out for economic data and the ongoing Middle East conflict.
Even after its third-quarter results beat expectations, Meta Platforms dropped 2.6% in premarket trading with the Facebook parent forecasting 2024 spending above estimates and suggesting the conflict in Israel and Gaza could dampen fourth-quarter sales.
With the 10-year Treasury yield hovering near the 5% mark, other megacaps including Tesla and Microsoft fell 2.9% and 1%, while Amazon.com shed 1.4% ahead of its results after the closing bell.
Alphabet, too, lost 2.1% after Wednesday's 9.5% slide following disappointing cloud services revenue, steering a tumble on Wall Street in the prior session.
The S&P 500 index closed below the closely watched 4,200 level on Wednesday.
At 5:14 a.m. ET, Dow e-minis were down 117 points, or 0.35%, S&P 500 e-minis were down 27.25 points, or 0.65%, and Nasdaq 100 e-minis were down 146.25 points, or 1.01%.
United Parcel Service, Merck & Co, Honeywell International, Southwest Airlines and Boston Scientific are some of the major companies detailing their earnings before markets open.
So far, 80% of the 146 S&P 500 companies that have reported their results beat earnings expectations, LSEG data showed on Wednesday.
Investors will also parse a slate of data, including September's durable goods, an advance estimate of third-quarter gross domestic product and weekly jobless claims, during the day to assess economic health and the outlook for interest rates.
Traders see a 97% chance of the Federal Reserve holding its rates steady on Nov. 1 at a meeting, while that for the December meeting stood at around 69%, according to CME's FedWatch tool.
On the geopolitical front, Israel bombarded the Gaza Strip, preparing for a ground invasion it says is aimed at annihilating the Palestinian militant group Hamas as Russia warned the conflict could spread beyond the Middle East.
Among other stocks, Ford Motor advanced 1.4% after reaching a tentative labor deal with the United Auto Workers union to end a strike.
Align Technology tanked 25.1% after the dental company lowered its full-year revenue forecast.
(Reporting by Ankika Biswas in Bengaluru; Editing by Maju Samuel)
