Markets today: Nasdaq futures sink as AI results don’t match hype

U.S. equity futures slumped after earnings from tech giants fell short of Wall Street’s lofty expectations and as investors prepared for the first interest-rate decision of the year from the U.S. Federal Reserve.

Contracts on the Nasdaq 100 slid 1.2 per cent, while those on the S&P 500 retreated 0.5 per cent. Microsoft Corp., Alphabet Inc. and Advanced Micro Devices Inc. dropped in premarket trading after their updates failed to match the market hype around tech megacaps and artificial intelligence that has helped drive the recent record-setting rally in U.S. stocks. 

“These are good numbers, but the expectations were huge and there is a real issue of traveling and arriving,” Peter Oppenheimer, Goldman Sachs Group Inc. chief global equity strategist, said on Bloomberg Television. “These companies are generating fantastic revenue growth and are in a very strong position, but I think the upside from a market perspective in the short term was likely to be limited given the expectations that have been priced in.”

In other individual stock moves, Paramount Global soared 21 per cent after Bloomberg reported that media mogul Byron Allen made a US$14.3 billion offer for the company. Tesla Inc. fell as much as 3.4 per cent after Elon Musk’s $55 billion pay package at the electric automaker was struck down by a Delaware judge.