Nasdaq-100 futures traded lower Wednesday as investors were underwhelmed by quarterly reports from megacap tech companies Alphabet and Tesla. Futures tied to the tech-heavy Nasdaq-100 moved down 1.5%, while S&P 500 futures fell 1%. Dow Jones Industrial Average futures lost 190 points, or 0.5%. Shares of Google parent company Alphabet fell more than 4% in premarket trading. Although Alphabet reported a top and bottom line beat, YouTube advertising revenue fell below the consensus estimate. Meanwhile, Tesla shares declined more than 8% on weaker-than-expected results and a 7% year-over-year drop in auto revenue. Those reports mark investors’ first look at how megacap companies fared during the second quarter. Reports from these names are of special interest to Wall Street as this small cohort is responsible for the bulk of this year’s gains. More than 20% of the S&P 500 companies have reported their second-quarter earnings, with 80% of them topping expectations, according to FactSet data. Wall Street is coming off a losing session, with the major averages pulling back slightly. Investors have largely priced in the chances of the Federal Reserve cutting interest rates at its September meeting. Combined with rising confidence in a soft landing, the market has continued its rally, with rate-sensitive sectors such as small caps and industrials rising in recent weeks. “You’re left with an economy that continues to grow, corporations that continue to manage the environment very, very well and a market that’s reflecting that in its elevated valuations,” said Solus Alternative Asset Management chief strategist and economist Dan Greenhaus. Treasury yields slipped on Wednesday as investors looked ahead to a fresh batch of economic data and considered the outlook for the U.S. economy. The yield on the benchmark 10-year Treasury note was flat at 4.238%, while the yield on the 2-year Treasury note was also flat to trade at 4.424%. Asia-Pacific markets fell Wednesday as traders assessed July business activity data from Japan and Australia, and tech earnings from the U.S. Hong Kong’s Hang Seng index fell 1.1% as of its final hour, reversing earlier gains, while mainland China’s CSI 300 slipped 0.63% to a two week low of 3,418.16. Japan’s Nikkei 225 dropped 1.11% to close at 39,154.85, marking a one-month low. The index was dragged by utilities and real estate stocks, while the broad-based Topix was down 1.42% to end at 2,793.12. South Korea’s Kospi was 0.56% lower at 2,758.71, while the small-cap Kosdaq rose 0.26% and finished at 814.25, the only major Asian benchmark in positive territory. Australia’s S&P/ASX 200 was little changed at 7,963.7, after the country saw its private sector activity expand at a slower pace in July, with the composite purchasing managers’ index dropping to a six-month low of at 50.2 compared to 50.7 in June, according to Juno Bank. U.S. crude oil futures rebounded more than 1% Wednesday, breaking a three-day losing streak as an industry report pointed to falling U.S. crude inventories and as wildfires in Canada raise the risk of supply disruptions. The American Petroleum Institute reported that U.S. crude oil stocks fell by 3.86 million barrels for the week ended July 19, according to reports. It is the fourth consecutive week of inventory declines. The Department of Energy will release official data at 10:30 a.m. ET. West Texas Intermediate September contract: $77.81 per barrel, 85 cents, or 1.1%. Year to date, U.S. crude oil has gained 8.6%. Brent September contract: $81.72 per barrel, down 71 cents, or 0.88%. Year to date, the global benchmark is ahead 6.1%. Gold prices inched higher on Wednesday, with investors awaiting U.S. economic data that could influence the Federal Reserve’s rate-cut timeline. Spot gold was up 0.3% at $2,416.62 per ounce, as of 0402 GMT. U.S. gold futures gained 0.4% to $2,417.10.
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