Stock futures edged lower Tuesday evening as investors digested a batch of corporate earnings results, and eyed a rocky start to talks over another round of coronavirus-related fiscal stimulus in Washington.
Tech shares fell anew during the regular session Tuesday, with the Nasdaq Composite touching a record intraday high in the morning before sinking 0.8% by market close. The losses, however, did not erase all of the index’s 2.5% gain on Monday. Each of the S&P 500 and Dow closed higher.
Internet companies including Facebook (FB), Pinterest (PINS) and Twitter (TWTR) extended losses overnight, falling in sympathy with Snap (SNAP) after the social media company reported a smaller than expected increase in second-quarter daily active user numbers after market close on Tuesday. The results tempered investor expectations for the massive growth tech stocks demonstrated in the first quarter to continue at the same rate the rest of the year. Last week, Netflix (NFLX) had topped expectations for net subscriber additions in the second quarter, but disappointed sharply to the downside for third-quarter guidance.
On Wednesday, more major tech companies are set to report quarterly results, with Microsoft and Tesla set to be among the most highly anticipated. Many Wall Street analysts expect to see Microsoft (MSFT) post another strong quarter of growth especially in Azure, its cloud unit, as many companies kept working remotely during the quarter and leaned on cloud services for day-to-day operations. And Tesla (TSLA) is set to be eligible for consideration for inclusion in the S&P 500 if it ekes out a GAAP profit in its second quarter, which would mark a fourth straight quarter of GAAP profitability. Shares of both Microsoft and Tesla rose in late trading.
Investors also continued to monitor developments in Washington, with debates over another round of fiscal stimulus under way. The White House and Senate Republicans hit impasses on Tuesday, with the two sides sparring over whether or not to include a payroll tax cut, as President Donald Trump has demanded, or add more money for testing and to the Centers for Disease Control and Prevention, among other points of contention.
Treasury Secretary and White House Chief of Staff Mark Meadows told Bloomberg they are aiming to get a package through Congress by the end of next week, or the time at which current measures including the $600 per week in additional federal unemployment benefits are set to end. Senate Majority Leader Mitch McConnell, however, was less certain on a deal passing the end of next week, according to Politico.
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Here were the main moves at the start of the overnight session for U.S. equity futures, as of 6:08 p.m. ET:
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S&P 500 futures (ES=F): 3,249.5, down 1.75 points or 0.05%
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Dow futures (YM=F): 26,717.00, down 9 points, or 0.03%
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Nasdaq futures (NQ=F): 10,847.00, down 4 points, or 0.04%
NEW YORK, NEW YORK – MAY 26: A trader walks by the New York Stock Exchange (NYSE) on the first day that traders are allowed back onto the historic floor of the exchange on May 26, 2020 in New York City. While only a small number of traders will be returning at this time, those that do will have to take temperature checks and wear face masks at all times while on the floor. The Dow rose over 600 points in morning trading as investors see economic activity in America picking up (Photo by Spencer Platt/Getty Images)
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