US Stocks Likely To Open Lower Following Alphabet, AMD Earnings: Walt Disney, Uber, Ford, Qualcomm In Focus
U.S. stock futures declined on Wednesday after Tuesday’s advances amid trade war concerns and major earnings reports. Three benchmark indices were trading lower, whereas the gauge tracking small-cap stocks, Russell 2000 rose marginally.
Walt Disney Co. (NYSE:DIS), Qualcomm Inc. (NASDAQ:QCOM), Uber Technologies Inc. (NYSE:UBER), and TotalEnergies SE (NYSE:TTE) are a few major companies expected to report earnings today.
The 10-year Treasury yield stood at 4.47%, while the two-year yield was at 4.19%. According to the CME Group's FedWatch tool, there is an 83.5% chance that the Federal Reserve will keep interest rates unchanged for the March meeting.
| Futures | Change (+/-) |
| Nasdaq 100 | -0.92% |
| S&P 500 | -0.55% |
| Dow Jones | -0.23% |
| Russell 2000 | 0.06% |
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ) both experienced negative premarket trading on Wednesday. SPY fell 0.51% to $598.73, and QQQ declined 0.87% to $519.92, according to Benzinga Pro data.
Cues From The Last Session
Tech, Energy, and Communication Services sectors led U.S. stock gains Tuesday, despite geopolitical tensions and trade uncertainties. Utilities and consumer staples declined.
Spotify Technology SA (NYSE:SPOT) shares jumped 13% on strong earnings, while Palantir Technologies Inc. (NASDAQ:PLTR) soared 24% on better-than-expected results.
China retaliated against U.S. tariffs with restrictions on mineral exports and tariffs on energy products. Job openings fell to 7.6 million, below estimates, and factory orders declined 0.9%.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | 1.35% | 19,654.02 |
| S&P 500 | 0.72% | 6,037.88 |
| Dow Jones | 0.30% | 44,556.04 |
| Russell 2000 | 1.41% | 2,290.20 |
Insights From Analysts
According to the analysts at BlackRock, the recent artificial intelligence developments raise questions about AI investment and revenue.
As markets learn about the ongoing transformation, BlackRock is using a framework as key for tracking big structural shifts, given a widening range of market outcomes.
“We use our three-phase framework – buildout, adoption, transformation – to track AI,” its note stated. Adding that “We see a broadening set of AI beneficiaries and stay overweight U.S. stocks.”
Talking about the tariffs, BlackRock opined, “This marks an escalation in trade protectionism, and we think that some level of tariffs is likely to remain in place over time. Uncertainty is high on how the trade dispute will play out on supply chains, growth and inflation.”
Highlighting that 80% of Mexico's exports and 70% of Canadian exports come to the U.S., the VP and global macro strategist at Carson Research, Sonu Varghese said “This asymmetric dependency is perhaps what Trump is hoping to leverage — to get them both at the table, and extract concessions.”
According to Varghese, China’s economy is becoming less reliant on trade, with trade now accounting for less than 40% of its economy, down from 60% two decades ago. Trade with the U.S. has also decreased, especially in areas affected by tariffs in 2018-2019.
However, China has circumvented these tariffs by increasing trade with other countries. China’s share of global trade has increased since 2016.
“This means the U.S. has much less leverage over China, relative to Canada and Mexico. But this is why there is a possibility of seeing universal tariffs,” to prevent China from circumventing them, he added.
Upcoming Economic Data
Here’s what investors will keep an eye on Wednesday:
- January’s ADP employment data will be out at 8:15 a.m., and December’s U.S. trade deficit data will be released at 8:30 a.m., ET.
- Richmond Fed President Tom Barkin will speak at 9:00 a.m., ET.
- January’s S&P final U.S. services PMI will be announced at 9:45 a.m. and ISM services data will be out by 10:00 a.m., ET.
- Chicago Fed President Goolsbee will speak at 1:00 p.m., Fed Governor Michelle Bowman will speak at 3:00 p.m., and Fed Vice Chairman Philip Jefferson will speak again at 7:30 p.m., ET.
Stocks In Focus:
- Walt Disney Co. (NYSE:DIS) was down 0.05% in the premarket on Wednesday ahead of its earnings before the opening bell. Analysts expect it to report quarterly earnings of $1.45 per share on revenue of $24.62 billion.
- Uber Technologies Inc. (NYSE:UBER) rose 0.19% as Wall Street expects it to report quarterly earnings of 50 cents per share on revenue of $11.77 billion before the opening bell.
- Ford Motor Co. (NYSE:F) declined 0.1% as it is expected to report earnings after market closes. According to Benzinga's consensus estimates, the company is expected to report earnings of 33 cents per share on revenue of $43.25 billion.
- Alphabet Inc. (NASDAQ:GOOG) was down 6.95% as it reported better-than-expected fourth-quarter earnings, while sales missed estimates. Google Cloud revenue was up 30% year-over-year to $12 billion.
- Advanced Micro Devices Inc. (NASDAQ:AMD) slipped 8.49% after the underperformance of its highly anticipated data center business. Whereas fourth quarter earnings and sales were upbeat.
- Qualcomm Inc. (NASDAQ:QCOM) dropped 0.37%, TotalEnergies SE (NYSE:TTE) gained 1.49%, MicroStrategy Inc. (NASDAQ:MSTR) fell 1.22% and Cognizant Technology Solutions Corp. (NASDAQ:CTSH) was up 0.01% ahead of its earnings today.
Commodities, Gold And Global Equity Markets:
Crude oil futures were trading lower in the early New York session by 1.02% to hover around $71.96 per barrel.
The gold spot index was up by 1.04% to $2,871.52 per ounce. The Dollar Index was down 0.38% at 107.545 level.
Asian markets were mixed on Wednesday as China's CSI 300, and Hong Kong's Hang Seng index declined. Whereas, Australia's ASX 200, South Korea's Kospi, and Japan's Nikkei 225 index advanced. European markets were mostly lower in trade.
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