U.S. stock futures fell late Tuesday after Alphabet’s disappointing third-quarter results marked a worrying start to Big Tech’s earnings this week.
Dow Jones Industrial Average futures fell 75 points, or 0.24%. S&P 500 and Nasdaq 100 futures fell 0.96% and 2.04% respectively.
Shares of Alphabet, Google’s parent company, fell more than 6% in extended trading. The online search giant missed expectations on the top and bottom lines. Alphabet also reported a decline in YouTube ad revenue, prompting investors to ponder the prospects of other tech companies that rely on ad spend.
“I think we need to take a big picture perspective and recognize that no one is really immune in this market, there is a slowdown in digital ad spend,” Brenda Vingiello of Sand Hill Global Advisors said Tuesday on CNBC’s “Closing Bell: Overtime”.
Other mega-cap tech stocks fell after hours trading on the back of the report. Shares of Meta Platforms fell 4.1% and Amazon fell 2%.
Meanwhile, Microsoft was down about 3% after the tech giant reported weaker-than-expected cloud revenue in its latest quarterly results, despite higher earnings and revenue estimates.
In Tuesday’s regular session, the Dow Jones Industrial Average advanced 337 points, or about 1.1%. The S&P 500 rose 1.6%, while the Nasdaq Composite jumped 2.2%. These gains, following a drop in bond yields, helped the major averages extend their rally for a third straight day.
Traders expect quarterly results from Boeing and Kraft Heinz on Tuesday before the bell, along with more Big Tech earnings from Meta after the bell.
They also monitor the latest economic data on weekly mortgage applications, wholesale inventories and new home sales.