U.S. stock futures fall amid slew of fresh corporate earnings

By Scott Kanowsky

Investing.com -- Wall Street futures were lower on Wednesday, with traders looking ahead to a fresh set of corporate results and key U.S. gross domestic product figures later this week.

At 06:55 ET (11:55 GMT), the Dow Futures contract was down 179 points or 0.53%, S&P 500 Futures traded 29 points or 0.74% lower, and Nasdaq 100 Futures dipped 147 points or 1.24%.

Weighing on sentiment ahead of the U.S. session were disappointing results from Microsoft Corporation (NASDAQ:MSFT). The software giant posted its slowest sales growth in six years and warned that there may be worse to come, sending shares in the company down in pre-market trading.

Revenue grew only 2% year-over-year in the three months through December to $52.7 billion, missing the consensus estimate of $53.12B. While earnings were fractionally ahead of expectations at $2.32 a share, they were still down 12% on the year at $16.4B.

Microsoft's numbers have significant implications for the rest of the U.S. stock market, given its massive reach across all sectors of the economy. While there was little shocking about them, they added to impressions that the U.S. economy will face a tough time this year. The company had already announced some 10,000 job cuts earlier in the week.

Focus is now expected to turn to Tesla, Inc. (NASDAQ:TSLA), which publishes its latest quarterly earnings after markets close. Elon Musk's electric car manufacturer is forecast to post record profits for the final three months of 2022 despite a slowdown in vehicle deliveries.

Other companies set to report results today include AT&T Inc. (NYSE:T), International Business Machines (NYSE:IBM), and Boeing Co. (NYSE:BA).

The spotlight is also shifting on to preliminary U.S. gross domestic product numbers, which are scheduled to be released on Thursday. Economists predict that the major measure of economic growth declined to 2.6% in the last three months of 2022, down from the prior quarterly marker of 3.2%.

Elsewhere, equities in Europe were subdued but steady, while Asian shares touched their highest levels in seven months as many markets reopened after Lunar New year holidays. Volumes remained muted, however, with key markets in China and Taiwan still closed.

World stock markets have performed broadly stronger so far this year compared to a rollercoaster 2022. Many traders predict that the Federal Reserve will slow its recent monetary policy tightening cycle following signs of potentially peaking inflation, while optimism has also been boosted by the sudden scrapping of COVID-19 restrictions in China.

The slightly more upbeat outlook helped business morale in Germany - Europe's largest economy - improve in January. The Ifo Institute said its business climate index increased to 90.2 during the month, in line with estimates and better than the previous reading of 88.6 in December.

Meanwhile, the extent of China's recovery in demand, as well as the possibility of oil group OPEC+ keeping production unchanged at its meeting next week, were key themes in energy markets. By 06:55 ET, the U.S. crude futures traded 0.22% higher at $80.31 per barrel and the Brent contract increased by 0.10% to $86.22 a barrel.

Additionally, gold futures edged down 0.50% to $1,925.80/oz, while EUR/USD dropped 0.19% at 1.0864.