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Growing fears of a global economic slowdown and a more
aggressive Federal Reserve pummeled technology and growth stocks
on Tuesday, with Tesla's 12% slump weighing the most on the S&P
500 and the Nasdaq.
The sentiment appeared to improve in premarket trading as
Microsoft Corp jumped 5% after it forecast double-digit revenue
growth for the next fiscal year, driven by demand for cloud
computing services.
Visa Inc rose 5.6% after the payments network said it expects
revenue to accelerate past pre-pandemic levels, fueled by a
rebound in consumer spending.
However, Google-parent Alphabet Inc fell 2.8% as slowing YouTube
ad sales led the company to report quarterly revenue below
expectations.
Nearly a third of the companies on the S&P 500 will report
results this week. Facebook-owner Meta Platforms Inc, which will
report results after market close, fell 2.1%.
Megacap growth stocks have been battered since the start of the
year as investors fear about the impact of higher interest
rates, inflationary pressures, geopolitical tensions and China's
COVID-19 led lockdown on the global economic outlook.
"I don't think there is confidence right now in renewed
leadership (in megacap stocks) but with the declines there will
be attempts to find entry points into some of these major
names," said Neil Wilson, chief markets analyst at Markets.com.
The tech-heavy Nasdaq has shed 20.2% so far this year, while the
benchmark S&P 500 is down 12.4%.
Nevertheless, overall earnings have been better than expected.
Of the 134 companies in the S&P 500 that reported earnings
through Tuesday, 80.6% of them have exceeded Wall Street
expectations. Typically, only 66% of companies beat estimates.
At 07:01 a.m. ET, Dow e-minis were up 353 points, or 1.06%, S&P
500 e-minis were up 36.75 points, or 0.88%, and Nasdaq 100
e-minis were up 108.5 points, or 0.83%.
Among other movers, toymaker Mattel Inc climbed 11.3% after a
source told Reuters it was exploring a sale.
Audio streaming platform Spotify Technology SA's U.S.-listed
shares gained 2.8% after it reported quarterly revenue that beat
analysts' estimates on higher advertising income.
(Reporting by Bansari Mayur Kamdar and Medha Singh in Bengaluru;
Editing by Arun Koyyur)
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