Market Analysis

US stock futures remain stable as Wall Street is battered by tech losses; earnings are prime

Amos Simanungkalit · 16 Oct 202436.5K Views

U.S. stock index futures stabilized in evening trading on Tuesday after a decline in technology stocks—sparked by weak earnings from chipmaking leader ASML—pulled Wall Street off record highs. Attention remains on corporate earnings, with the third-quarter reporting season continuing this week.

By 19:09 ET (23:09 GMT), S&P 500 Futures were steady at 5,863.75 points, while Nasdaq 100 Futures edged up to 20,355.75 points. Dow Jones Futures remained flat at 43,009.0 points.

Chipmakers Hit by Weak ASML Outlook The tech sector took a hit due to losses in major chipmakers after ASML Holding (NASDAQ) lowered its annual outlook, citing weak demand for non-AI-related chips. The stock dropped 16.3% on Tuesday but recovered slightly in after-hours trading. Despite the revised forecast, ASML’s third-quarter earnings exceeded expectations.

Additionally, chipmakers were unsettled by reports that the U.S. government might restrict the sale of AI-related chips to specific countries, signaling potential sales declines. NVIDIA Corporation (NASDAQ) fell 4.5%, while competitors AMD (NASDAQ) and Intel Corporation (NASDAQ) lost 5.2% and 3.3%, respectively. All three stocks stabilized in after-hours trading.

Eyes are now on Taiwan’s TSMC (NYSE), the world’s largest contract chipmaker, which will report its third-quarter earnings on Thursday. As a key player in the chipmaking sector, TSMC’s results are highly anticipated.

The losses in chipmakers dragged Wall Street lower, with the S&P 500 slipping 0.8% to 5,815.26 points. The NASDAQ Composite declined nearly 1% to 18,322.05 points, while the Dow Jones Industrial Average dropped 0.8% to 42,740.42 points, all retreating from record levels.

Q3 Earnings Season Continues ASML’s weak forecast overshadowed upbeat results from major banks such as Goldman Sachs Group Inc (NYSE), Citigroup Inc (NYSE), and Bank of America Corp (NYSE). Morgan Stanley (NYSE) is set to complete bank earnings reports on Wednesday, alongside Abbott Laboratories (NYSE) and U.S. Bancorp (NYSE). Netflix Inc (NASDAQ) is slated to report on Thursday.

The earnings season will peak next week with key reports from tech giants, including Alphabet Inc (NASDAQ) and Tesla Inc (NASDAQ).

Beyond corporate earnings, investors are also focusing on speeches from several Federal Reserve officials amid growing speculation that interest rates may decrease more gradually than anticipated.