Investing.com– U.S. stock index futures fell in evening deals on Tuesday as fears of higher-for-longer interest rates gained traction before the conclusion of a Federal Reserve meeting later in the day.
Mixed earnings from Amazon.com Inc (NASDAQ:) also offered differing cues, as the e-commerce and tech giant clocked stronger earnings on artificial intelligence demand for cloud computing but forecast increased costs.
fell 0.2% to 5,055.00 points, while fell 0.4% to 17,494.75 points by 19:53 ET (23:53 GMT). fell 0.1% to 37,961.0 points.
Wall St tumbles as Fed fears grow, tech slammed by profit-taking
Losses in futures were an extension of a dour session on Wall Street, as fears of the Fed saw traders collect a large degree of recent profits in technology shares.
The Fed is widely expected to keep rates on hold at the later on Wednesday. But Fed Chair Jerome Powell is likely to offer a hawkish outlook, as a series of hot inflation readings sapped the central bank of confidence to cut rates.
A higher-than-expected added to concerns over sticky inflation on Wednesday.
The Fed is now expected to begin cutting rates only by September, if at all this year.
The prospect of higher-for-longer interest rates bodes poorly for stocks, given that it limits the amount of liquidity in the economy which is usually directed towards investing activities.
Wall Street indexes tumbled on this notion on Tuesday. The slid 1.6% to finish at 5,035.69 points, while fell 2% to 15,657.82 points. The sank 1.5% to 37,815.92 points.
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All three indexes clocked steep losses for April, snapping a five-month winning streak.
Tech bore a brunt of the selling, with heavyweights Microsoft Corporation (NASDAQ:), Alphabet Inc (NASDAQ:) and Tesla Inc (NASDAQ:) losing between 2% and 5.5% after a stellar rally over the past few sessions. All three stocks moved in a flat-to-low range in aftermarket trade.
Aftermarket movers: Amazon rises while AMD, Starbucks tumble
Amazon.com rose 1.3% as its first-quarter earnings beat estimates. But gains were limited as its revenue forecast disappointed, as the e-commerce giant forecast increased costs on AI spending.
Advanced Micro Devices Inc (NASDAQ:) slid nearly 7% after the NVIDIA Corporation (NASDAQ:) competitor’s first-quarter earnings came in as expected, as did its second-quarter forecast. The chipmaker still forecast stronger demand on the back of increased AI development.
Coffee chain Starbucks Corporation (NASDAQ:) tumbled nearly 12% after its first quarter profit missed expectations, while its revenue weakened on worsening demand in North America and China.
