Nasdaq stock futures traded lower Tuesday night after megacap tech companies Alphabet and Tesla reported their second-quarter results.
Futures tied to the tech-heavy Nasdaq 100 moved down 0.5%, while S&P 500 futures fell 0.4%. Dow Jones Industrial Average futures slipped 0.2%.
Shares of Google parent company Alphabet fell 1% in extending trading. Although Alphabet reported a top and bottom line beat, Youtube advertising revenue fell below the consensus estimate. Meanwhile, Tesla shares declined more than 4% on weaker-than-expected results and a 7% year-over-year drop in auto revenue.
At the start of the week, around 20% of the S&P 500 companies that had reported their second-quarter earnings, with 80% of them topping expectations, according to FactSet data.
During Tuesday’s main trading session, the broad market index pulled back around 0.2%, while the Nasdaq Composite and the Dow inched down around 0.1% each.
Investors have largely priced in the chances of the Federal Reserve cutting interest rates at its September meeting. Combined with rising confidence in a soft landing, the market has continued its rally, with rate-sensitive sectors such as small caps and industrials rising in recent weeks.
“You’re left with an economy that continues to grow, corporations that continue to manage the environment very, very well and a market that’s reflecting that in its elevated valuations,” said Solus Alternative Asset Management chief strategist and economist Dan Greenhaus.
Regarding the market rally, Greenhaus added, “As long as something doesn’t change on that front, I don’t know why I would be any more scared tomorrow or the next day that I’ve been over the previous eight, three months.”
On the earnings front, investors will be looking at AT&T, General Dynamics and Boston Scientific’s quarterly results Wednesday morning.
