Investing.com-- U.S. stock index futures fell Wednesday, with technology stocks seeing renewed weakness after underwhelming second-quarter earnings from heavyweights Alphabet and Tesla.
At 06:10 ET (10:10 GMT), Dow Jones Futures fell 160 points, or 0.4%, S&P 500 Futures dropped 38 points, or 0.7%, and Nasdaq 100 Futures slipped 200 points, or 1%.
The disappointing earnings could set a dour tone for more quarterly prints due in the coming days, and also point to a renewed rout in the sector, which has been battered by profit-taking and a rotation into more economically sensitive sectors over the past week.
Tesla tumbles as profit disappoints, outlook sours
Tesla (NASDAQ:TSLA) stock tumbled nearly 8% premarket after its second-quarter earnings missed estimates amid falling vehicle sales.
Tesla’s profit margins fell to a five-year low as the electric vehicle maker aggressively cut prices to grapple with increased competition in key markets such as China.
Costs during the quarter rose sharply on increased expenditure on artificial intelligence and robotaxis, although the latter’s reveal was delayed to October from August.
Alphabet falls despite earnings beat
Google-parent Alphabet (NASDAQ:GOOGL) fell over 3%, even as its second-quarter earnings beat expectations on increased advertising sales and strong demand for its cloud services.
But advertising sales- which are the company’s top revenue source- grew at a slower pace in the quarter, while revenue from YouTube missed some market expectations.
Alphabet’s expenses also rose substantially year-on-year amid continued expenditure on AI development- a trend that is expected to eat into profit margins in the coming quarters.
Losses in Alphabet and Tesla spooked the broader tech sector, which was already nursing steep losses over the past week.
More quarterly earnings due
The focus remains on a string of upcoming earnings prints, with more results due Wednesday from the likes of International Business Machines (NYSE:IBM), Qualcomm Incorporated (NASDAQ:QCOM), ServiceNow (NYSE:NOW), AT&T (NYSE:T), Ford (NYSE:F) and General Dynamics Corporation (NYSE:GD).
Markets were also looking at any new developments in the presidential race, after President Joe Biden dropped out over the weekend and endorsed Vice President Kamala Harris as the Democratic frontrunner.
Harris was seen taking a slight lead over Republican nominee Donald Trump, according to a Reuters/Ipsos poll.
Crude boosted by US inventories
Crude prices rose Wednesday, snapping three straight sessions of decline, as falling U.S. crude inventories boosted demand hopes from the world’s largest consumer.
By 04:10 ET, the U.S. crude futures (WTI) climbed 0.8% to $77.56 a barrel, while the Brent contract rose 0.5% to $81.44 a barrel.
Data from the American Petroleum Institute showed U.S. oil inventories shrank by 3.9 million barrels last week, compared with expectations for a build of 0.7 million barrels.
The API data, if confirmed by official inventory data due later in the session, showed inventories shrinking for a fourth consecutive week, as oil demand likely picked up with the travel-heavy summer season.
Both contracts had lost between 5% and 7% over the previous three sessions, tumbling to their weakest levels since early-June.
(Ambar Warrick contributed to this article.)