On Thursday, US stock futures indicated a potential rebound as investors digested earnings reports from major tech giants and awaited Apple's quarterly results. Contracts for the Nasdaq 100 and S&P 500 showed modest gains, while the Dow Jones Industrial Average remained relatively stable. The market's focus shifted to the performance of key technology companies, especially after Microsoft, Meta, and Tesla released their earnings. Investors are keenly watching these firms' strategies in artificial intelligence (AI) investments, which have recently faced challenges following DeepSeek's disruptive AI model. Additionally, economic indicators like fourth-quarter GDP growth and weekly jobless claims are expected to provide further insights into the overall health of the economy.
In the wake of the Federal Reserve's decision to maintain interest rates, investors turned their attention to corporate earnings. The first wave of reports from leading tech companies, often referred to as the "Magnificent Seven," has been pivotal in shaping market sentiment. Late Wednesday, Microsoft, Meta, and Tesla unveiled their financial results, offering mixed signals about the sector's prospects. Despite missing earnings targets, Tesla's shares saw a boost as investors embraced the company's commitment to returning to growth in 2025. Meanwhile, Meta's better-than-expected earnings lifted its pre-market shares, but Microsoft's stock dipped due to lower-than-anticipated cloud revenue. As the day progresses, all eyes will be on Apple, whose stock has faced multiple downgrades, to gauge the strength of iPhone sales and overall performance.
The broader market is also reacting to significant macroeconomic data. The Bureau of Economic Analysis reported that the US economy grew at an annualized rate of 2.3% in the fourth quarter, slower than the 2.6% expected by economists. This deceleration from the third quarter's 3.1% growth highlights ongoing economic challenges. Consumer spending and government expenditures contributed positively to the GDP, but investment declines offset some gains. For the year, the US economy expanded by 2.8%, slightly below the previous year's 2.9% growth. Investors will closely monitor additional economic reports, including the personal consumption estimate and initial jobless claims, to assess the economic trajectory.
Apart from economic and corporate news, a tragic mid-air collision between an American Airlines passenger jet and a US Army helicopter near Reagan Washington National Airport dominated headlines. This incident underscores the importance of aviation safety and may influence future regulations and operational protocols. Furthermore, various sectors, including retail and finance, continue to face unique challenges. Levi Strauss & Co. experienced a downturn due to lower-than-expected earnings guidance, reflecting structural changes in the retail landscape. Meanwhile, Goldman Sachs maintains its forecast for interest rate cuts in 2025, anticipating a decline in core PCE inflation.
The day ahead promises to be eventful, with more earnings reports from companies like Intel, Comcast, Mastercard, and Visa. Investors will scrutinize these reports for signs of resilience or vulnerability in the current economic environment. The market's response to Apple's earnings will be particularly telling, as it could set the tone for Big Tech's performance in the coming months. Overall, the interplay between corporate earnings, economic indicators, and geopolitical events will shape investor sentiment and market dynamics in the near term.