Wall Street futures stalled near record levels on Thursday, as traders digested a tempered U.S. rate-cut outlook, a spate of Big Tech earnings and a newly announced U.S.–China trade deal.
The Fed delivered the expected quarter‑point cut on Wednesday, but its statement flagged gaps in official data amid the federal shutdown. Chair Jerome Powell said policymakers may turn more cautious if jobs and inflation data stay scarce.
Powell's comments prompted traders to unwind some bets on another similar-sized move at Fed's December meeting to about 70% from 90% earlier this week.
Among tech giants, Meta Platforms dropped 7.4% in premarket trading and Microsoft fell 2.8% on concerns of mounting spending on AI.
The Instagram-parent stunned investors with a near-$16 billion one-time charge that gutted third-quarter profit and flagged 2026 capex as "notably larger" next year.
Microsoft cautioned that capital expenditures will increase this year, reversing its earlier forecast of moderation.
Alphabet, on the other hand, jumped 7.5% after strong AI demand powered better-than-expected quarterly results.
"Megacap earnings and the AI theme should be dominant factors for the S&P 500 and risk assets. It would take a very strong hawkish shift in Fed rate expectations to derail the risk asset rally," said Ryan Wang, U.S. economist at HSBC.
Heavier spending signals from all three companies, combined with stretched valuations and a hawkish Fed tone, have prompted investors to pause in a month dominated by record peaks.
Nvidia's march to the $5 trillion milestone had helped Wall Street's main indexes notch record highs in the previous session before Powell's comments tempered some rate-cut expectations.
At 04:57 a.m. ET, Dow E-minis were down 103 points, or 0.22%, S&P 500 E-minis were up 0.25 points and Nasdaq 100 E-minis were up 13 points, or 0.05%.
Trade deal made, details awaited
U.S. president Donald Trump claimed a breakthrough with Chinese counterpart Xi Jinping on rare earths and tariffs after a nearly two-hour meeting on Thursday. Trump agreed to roll back some tariffs on Chinese imports in exchange for Beijing resuming soybean purchases, keeping rare earth exports flowing and cracking down on fentanyl trafficking.
Markets, however, were left guessing as details of the deal remain scarce and China has yet to comment.
Among other stocks, Chipotle Mexican Grill cut annual sales forecast for the third time this year, sending its shares down 17.6%.
(Reporting by Pranav Kashyap in Bengaluru; Editing by Krishna Chandra Eluri)
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