US equity futures fell along with stocks in Europe after post-market slumps in megacap technology shares marred a three-day rally on Wall Street and raised new doubts over whether this year’s $5.5 trillion selloff is nearing a bottom.
Contracts on the Nasdaq 100 tumbled 1.8% after disappointing quarterly updates from Microsoft Corp., Google parent Alphabet Inc. and Texas Instruments Inc. underscored growing pressure on the economy from the Federal Reserve’s interest-rate hikes.
Alphabet (GOOGL):
Google parent Alphabet (GOOG, GOOGL) reported its third-quarter earnings on Tuesday, falling short of analysts’ expectations on the top and bottom line, as YouTube advertising revenue came up $400 million short of estimates.
These are the most important numbers from the report compared to what Wall Street was expecting of the company, as compiled by Bloomberg.
Revenue ex-TAC: $57.27 billion versus $58.2 billion expected.
Earnings per share: $1.06 versus $1.25 expected.
Shares of Alphabet were down nearly 6% following the announcement.
The digital advertising market has been struck by a slowdown in spending in the past few quarters, as companies pull back their budgets amid rising inflation and interest rates.
Microsoft (MSFT):
The tech giant reported its slowest quarterly revenue growth in 5 years as a weakening PC market and the strong dollar weighed on results. Softer cloud sales was also a focus for investors in extended trading with Azure’s revenue growth decelerating to 35% during the quarter. Revenue from its Intelligent Cloud business, which includes Azure, totaled $20.3 billion. RBC Capital Markets Software Equity Analyst Rishi Jaluria told Yahoo Finance that the macroeconomic environment is deteriorating and he expects that to ‘continue to weigh on Azure’s numbers going forward.’
Visa (V):
Visa Inc. topped earnings expectations for its latest quarter Tuesday as the payments giant continued to call out strong consumer spending trends.
Payments volume at Visa V, +1.92% grew 10% in the fiscal fourth quarter, while processed transactions increased 12%. Visa’s revenue rose to $7.79 billion from $6.56 billion and came in ahead of the FactSet consensus, which was for $7.55 billion.
Visa is starting to lap stronger cross-border performance from a year ago, “so the rate of growth inevitably has slowed,” he said on the earnings call. But he noted to MarketWatch that given continued difficulties in getting airfares and hotel rooms, some people might still not even have been able to pursue the travel they desire.
For the latest quarter, the company reported net income of $3.94 billion, or $1.86 a share, compared with $3.58 billion, or $1.65 a share, in the year-earlier period. After adjustments, Visa earned $1.93 a share, up 19% from a year prior, while analysts tracked by FactSet were looking for $1.87 a share.
