US stock futures pulled back on Wednesday after earnings from Alphabet (GOOG, GOOGL) and AMD (AMD) fell short, with investors on alert for fresh moves in the brewing US-China trade war.
The tech-heavy Nasdaq 100 futures (NQ=F) led declines, down 0.8%, while S&P 500 futures (ES=F) dropped 0.5% as markets assessed the latest tech results. Dow Jones Industrial Average futures (YM=F) slipped 0.2% after the major gauges closed with gains.
Alphabet’s stock was under pressure, down almost 7% in pre-market trading, after fourth quarter cloud revenue undershot estimates. The miss rattled investors concerned that the Google parent’s hefty spending on AI won’t see the hoped-for payoff any time soon.
AI trade hopes were dealt a second blow by AMD’s earnings. While the chipmaker posted a quarterly revenue beat, a disappointing data center sales forecast raised worries about a loss of AI momentum. AMD shares tumbled over 8%.
President Donald Trump’s tariff plans have markets already jumpy, and his unexpected suggestion late Tuesday that the US could take over the Gaza strip and develop it as a “Riviera of the Middle East” left investors even more bemused about which direction policy will take next.
That said, uncertainty about Trump’s tariffs has prompted Morgan Stanley to lower its forecast for US interest-rate cuts this year. It now forecasts just one cut from the Federal Reserve in 2025. Updates on US services activity and private payrolls due later will help set expectations for the path of rates.
European stocks trod water as uncertainty over the US-China tariff face-off continued to dog markets, as investors absorbed corporate results from Santander (SAN) and elsewhere.
The pan-regional benchmark Stoxx 600 (^STOXX) index swung between small gains and losses.
Meanwhile, Germany’s DAX (^GDAXI) was little changed, while the CAC (^FCHI) in Paris slipped 0.3% into the red. In London, the benchmark (^FTSE) index traded broadly flat.
55 mins ago
Disney earnings beat as streaming swings to profit, parks take a hit
Disney (DIS) reported first quarter earnings on Wednesday that beat expectations. The media and entertainment giant reported a profit in its streaming segment, while its parks business faced setbacks in the midst of two back-to-back hurricanes and greater cruise ship investments.
Disney+ subscribers also fell by 700,000 in the quarter as a result of expected user churn amid recent price increases. The company hiked the price of its various subscription plans in mid-October.
Analysts polled by Bloomberg had expected subscribers to decline by 1.41 million. The company had reported a loss of 600,000 Disney+ subscribers in the year-ago period. For the current quarter, the company said it expects another “modest decline” in Disney+ subscribers compared to Q1.
Shares ticked up about 2% in pre-market trading following the results.
Revenue of $24.70 billion beat expectations of $24.57 billion in the quarter and represented a 5% increase from the prior-year period.
Adjusted earnings per share of $1.76 came in ahead of the $1.42 analysts polled by Bloomberg had expected. Earnings increased 44% from a year ago.
For full-year 2025, Disney reaffirmed guidance of high-single digit EPS growth compared to fiscal 2024. Estimates are calling for an 8.1% increase year over year.
Apple (AAPL) looks set to become the latest tech megacap to get embroiled in the tariff tug-of-war, as it drew the glare of China’s antitrust watchdog
The regulator is laying the groundwork for a potential investigation into Apple’s policies and App store fees, Bloomberg reported. Shares fell over 2.5% before the bell.
Economic data: MBA mortgage applications (week ending Jan. 31); ADP Private Payrolls (December); S&P Global US services PMI (January final); S&P Global US composite PMI (January final); ISM services index (January final)
Earnings: Disney (DIS), Aflac (AFL), Arm Holdings (ARM), Aurora Cannabis (ACB), Boston Scientific (BSX), Ford (F), Novo Nordisk (NVO), Qualcomm (QCOM), Toyota (TM), Uber (UBER), Viking Therapeutics (VKTX)
Here are some of the biggest stories you may have missed overnight and early this morning:
Goldman’s chief economist Jan Hatzius came out this morning with his latest call on tariffs. Notably, he expects 10% China tariffs to be just the starting point.
“While the tariffs on Canada and Mexico have been paused, the 10% additional tariff on imports from China has taken effect, and we expect that these tariffs will remain in effect for the foreseeable future. Our base case is that tariffs on imports from China increase further, though President Trump’s comments since inauguration have put much less emphasis on China than during the campaign. Nevertheless, we expect China-focused tariffs to rise by roughly another 10pp on top of the recently announced tariffs, via higher tariffs on primarily non-consumer products. An even higher tariff rate is a clear possibility—Trump recently mentioned the 60% tariff he proposed during the campaign—but we don’t view this as the base case.”
Good data-center sales growth of 69% year over year was the standout.
But the stock is being hit in pre-market, likely for two reasons. First, said data center growth missed estimates, and second, the company didn’t provide enough AI guidance for Wall Street.
KeyBanc analyst John Vinh called out this morning:
Today at 10:30 AM UTC
Chipotle gets roasted pre-market
Chipotle’s (CMG) stock is getting roasted pre-market, down 7%.
The company’s earnings had a few things the Street didn’t like from this high-multiple name. Sales guidance was soft, the quarterly sales result was soft, and margin commentary was mixed. January sales off to a slow start, too.
“We were disappointed in the comparable sales outlook but believe it could prove conservative, given the upcoming initiatives. Regardless, we reduced our 2025 operating profit estimate by less than 1% (margin better than expected), and we believe the current stock price offers an attractive entry point,” Stifel’s Chris O’Cull said in a note this morning.
O’Cull isn’t alone on the Street in defending the stock today.
I’ll have more insight into the story around 9:40 a.m. ET — Chipotle CFO Adam Rymer will be on Yahoo Finance.
Today at 6:31 AM UTC
Toyota Motor raises full-year operating profit forecast
Toyota Motor (TM)raised its full-year operating profit forecast by 9%, signaling confidence in its ability to weather any potential US tariffs.
The world’s top-selling automaker updated its profit projection for the fiscal year ending March 2025 to 4.7 trillion yen ($30.7 billion), up from the previous forecast of 4.3 trillion yen.
In addition, Toyota announced plans to set up a wholly owned subsidiary in Shanghai to develop and produce electric vehicles and batteries for its Lexus brand. Production is expected to begin in 2027. The new unit will focus on creating a new Lexus EV with an initial annual production capacity of around 100,000 units.
Despite posting weaker-than-expected third quarter results and marking its second consecutive quarterly profit decline, Toyota’s confidence in its future performance remains strong.
Today at 4:30 AM UTC
Gold sets new record high as trade war between US and China pushes need for stable assets
Gold (GC=F) has surged to a record high, climbing nearly 1% as the first shots of the US-China trade war increase demand for haven assets.
The price of bullion hit an all-time high, topping $2,854 an ounce on Wednesday. This spike followed President Donald Trump’s move to impose a 10% tariff on Chinese imports.
China’s retaliatory efforts have been less aggressive compared to earlier trade conflicts, when tariffs were nearly on par with the U.S. However, concerns remain about the potential impact on the world’s two largest economies. Markets are also closely watching to see if these renewed tariffs could trigger inflationary pressures, which might influence US monetary policy.
Today at 3:50 AM UTC
Asian stocks drop as investors react to rising trade tensions
Asian stocks were mostly lower Wednesday as markets digested the impact of the trade tensions brewing between China and the US.
The CSI 300 Index (000300.SS) quickly erased its initial gains on the first trading day after the Lunar New Year holiday closure, falling by 0.6%.
Japan’s benchmark Nikkei 225 (^N225) slipped 0.2% in early trading. Australia’s ASX 200 (^AXJO) rose 0.5%, while Hong Kong’s Hang Seng (^HSI) dropped 0.6%. South Korea’s Kospi (^KS11) jumped 1.1%
What started as a relatively calm day quickly became volatile after news broke that the US Postal Service would temporarily halt inbound parcels from China and Hong Kong. This move came just one day after both the US and China imposed tariffs on each other’s exports. Although there are still hopes for a deal to ease tensions, investors are pulling back as uncertainty lingers.
The stock outlook remains unclear, largely dependent on further developments in tariff negotiations and China’s economic recovery. US President Donald Trump stated there is no urgency to speak with Chinese President Xi Jinping.
