US Stock Futures and Earnings Update

US stock futures edge higher ahead of a wave of corporate earnings and a key release of US growth figures for Q3. Alphabet (NASDAQ: GOOGL) shares jumped in premarket trading, driven by solid performance in its cloud unit, resulting in profit and revenue that exceeded estimates. Conversely, shares in Advanced Micro Devices (NASDAQ: AMD) slumped after its Q4 revenue forecast fell short of expectations.

Futures Higher

US stock futures are showing positive movement as investors evaluate earnings from major technology companies and essential economic indicators. As of 04:30 ET (08:30 GMT), the Dow futures contract rose by 38 points (0.1%), S&P 500 futures gained 13 points (0.2%), and Nasdaq 100 futures increased by 49 points (0.2%).

In the previous trading session, the Nasdaq Composite achieved a record closing high while the S&P 500 rose, in contrast to a decline in the Dow Jones Industrial Average. The market is considering the Federal Reserve’s interest rate policy amid a report indicating a decline in job openings, a potential sign of weakened labor demand.

Alphabet Results Top Estimates

Alphabet’s Q3 results, released Tuesday, surpassed Wall Street projections, primarily due to robust demand for computing and data services critical for artificial intelligence applications.

• Net Income:
  • Q3: $26.3 billion (up from $19.7 billion YoY)
  • Estimates: $22.8 billion
• Total Revenue:
  • $88.27 billion (up 15% YoY)
  • Estimates: $86.37 billion

The Google Cloud division's revenue soared by 35% to $11.4 billion, with an operating profit rising to $1.9 billion, up from $266 million the previous year. Advertising revenue increased by 10% to $65.85 billion despite growing competition from AI chatbots.

AMD Shares Slide Premarket

Advanced Micro Devices saw its shares decline in premarket trading after the company’s fourth-quarter revenue guidance slightly missed analysts' expectations, reversing much of the over 10% gain achieved this year. The company did raise its sales projections for AI chips to $5 billion, but investors seemed underwhelmed.

AMD's supply chain for AI chips is under strain due to high demand from major tech firms, leading CEO Lisa Su to warn of tight supplies through 2025. Analysts from Morgan Stanley remarked that AMD's performance was largely in line with forecasts and expressed surprise at the stock's decline.

Earnings Parade Marches On

Wednesday is set to be busy as investors await more corporate results and economic data. Notable earnings reports include those from Microsoft (NASDAQ: MSFT) and Meta Platforms (NASDAQ: META), both key players in the tech sector. Drugmaker Eli Lilly (NYSE: LLY) and pharmaceutical company AbbVie (NYSE: ABBV) will also report before the market opens.

Traders will also get an initial look at the US GDP growth for Q3, with expectations of a 3.0% annualized rate, matching the previous quarter's figures. This data could influence public perception of the economy ahead of the significant presidential election on Nov. 5, where Democratic candidate Kamala Harris and former President Donald Trump remain close in polls.

Crude Gains

Oil prices increased on Wednesday, recovering some recent losses as industry data indicated an unexpected decrease in U.S. inventories. By 04:30 ET, the Brent contract rose 1.2% to $71.58 per barrel, while U.S. crude futures (WTI) increased by 1.3% to $68.11 per barrel. The American Petroleum Institute reported a decrease of 0.57 million barrels in U.S. oil inventories, contrasting with forecasts for a build of 2.3 million barrels. Further official inventory data is expected later today, which, if it aligns with these figures, could suggest tighter supplies in the U.S., the world's largest fuel consumer.