U.S. equity futures opened mixed on Thursday, navigating divergent earnings reports from tech behemoths. Alphabet’s significant 9% drop after missing third-quarter expectations weighed heavily on the Nasdaq, contrasting sharply with Microsoft’s 3% surge driven by robust Azure cloud performance. Amid this corporate volatility, the Federal Reserve’s decision to hold interest rates steady provided a backdrop as investors brace for upcoming economic data and more pivotal corporate results.
U.S. equity futures experienced a notable dip early Thursday, as investors navigated a fresh wave of earnings reports from the hyperscaler sector. The tech-heavy Nasdaq-100 futures bore the brunt, shedding 1.4%, while S&P 500 futures saw a more modest decline of 0.5%. In contrast, Dow Futures managed to eke out a 0.3% gain, indicating a split sentiment across the broader market.
Screens display the Fed rate announcement as traders work on the floor of the NYSE in New York City, US, Oct. 28, 2026.
Jeenah Moon | Reuters
The stark divergence in market performance was largely attributable to the after-hours trading reaction to quarterly results from two tech titans. Alphabet shares plummeted a dramatic 9% following its third-quarter report, which revealed a miss on both adjusted earnings per share and revenue expectations. Adding to investor concerns, the company posted a negative free cash flow of $9.07 billion and maintained a high full-year capital expenditures forecast of $195 billion to $205 billion.
Conversely, Microsoft proved a bright spot, with its shares climbing 3% in after-hours trading. The software behemoth surpassed top and bottom-line estimates for its fiscal first quarter, largely fueled by robust growth in its Azure cloud infrastructure business.
This mixed bag of results from hyperscalers comes as the artificial intelligence (AI) trade remains a significant focus for investors. While AI-related stocks, including the iShares Semiconductor ETF (SOXX) and the Roundhill Memory ETF (DRAM), have endured a volatile October, they have shown signs of resurgence recently. Indeed, chip sector strength helped lift the broader market in the previous regular session, with the S&P 500 marking its third consecutive day of gains, partly due to strong performances from Micron Technology (up nearly 6%) and Broadcom (adding over 2%). The Nasdaq Composite also managed a modest 0.3% advance.
In a widely anticipated move, the Federal Reserve opted to hold interest rates steady on Wednesday, maintaining the benchmark rate within the 3.75% to 4% range. This decision followed a quarter-percentage-point hike in September. While central bank policymakers acknowledged that inflation "remains elevated," they signaled a willingness to await "the accumulation of more information" before determining further policy adjustments. Daniel Siluk of Janus Henderson Investors characterized the Fed's stance as "an expression of patience rather than a shift away from a tightening bias," suggesting the door remains open for future tightening, but with a data-dependent approach.
Asian Markets React to Global Cues and Regional News
Across Asia, markets presented a mixed picture. Japan's Nikkei 225 saw a modest gain of 0.42%, while the Topix slipped 0.38%. South Korea's Kospi declined 2.14%, with its small-cap counterpart Kosdaq falling 2.75%. Australia's S&P/ASX 200, however, edged 0.46% higher. Hong Kong's Hang Seng index remained largely flat, while mainland China's CSI 300 registered a 1.20% decrease.
Regional corporate news also influenced sentiment. South Korean tech giant Samsung Electronics reported third-quarter operating profit that aligned with analyst expectations, buoyed by increasing demand for advanced memory chips critical for AI applications. The company's revenue soared 126.88% year-on-year, and operating profit surged 783.11%. Samsung further solidified its AI ambitions with a combined $1 billion investment in Helix Digital Infrastructure and a strategic partnership with French AI startup Mistral AI, including leading its Series D funding round.
In Japan, semiconductor test solutions provider Advantest saw its shares jump over 8% after raising its full-year outlook. The company cited robust market conditions, particularly strong demand for semiconductor testing equipment linked to AI, which it expects to continue into 2027.
Other Key After-Hours Movers and Upcoming Events
Beyond the tech giants, several other companies saw significant movement in after-hours trading. ServiceNow shares plummeted 18% after the enterprise software company missed adjusted profit expectations for its third quarter and offered conservative subscription revenue guidance. Other movers included Chipotle Mexican Grill, Fortinet, and Sprouts Farmers Market.
In the semiconductor and optics space, Lumentum shares surged 11% following a Bloomberg News report suggesting that Marvell Technology is in talks to acquire the optics maker. Lumentum, a key player in building optical transceivers and photonic technology for AI and data centers, has seen its shares rise significantly this year, reflecting its importance in the burgeoning AI infrastructure market. Conversely, chipmaker Marvell Technology saw its shares dip more than 8% on the news.
Chart: Lumentum and Marvell Technology stock performance over the past day (as referenced in original article).
Investors are now eagerly awaiting further economic insights, with the Personal Consumption Expenditures (PCE) price index report for September — the Federal Reserve's preferred inflation gauge — due on Thursday. Additionally, the first reading of third-quarter GDP and weekly jobless claims will provide a broader picture of the economy's health. On the corporate earnings front, Caterpillar and Eli Lilly are set to report in the morning, with Amazon and Intel slated for after the market close, promising another day of significant market catalysts.
