Stock market today: Live updates

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Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., January 29, 2024.

Brendan Mcdermid | Reuters

Futures tied to the tech-heavy Nasdaq 100 fell Tuesday night after a pair of mega-cap tech companies posted their quarterly results. Wall Street also looked toward the Federal Reserve’s decision on rate policy. 

Nasdaq 100 futures declined 0.8%. Futures tied to the S&P 500 were down 0.4%, while Dow Jones Industrial Average futures traded near the flatline.

In after-hours trading, shares of Alphabet dropped more than 5%, while Microsoft slipped nearly 1% after the tech giants posted quarterly earnings. To be sure, both companies managed to beat on both top and bottom lines. However, ad revenue for Alphabet came short of analysts’ expectations. 

The pullback in Alphabet and Microsoft shares, despite the companies’ largely positive results, may be more of a short term, “buy on rumors, sell on news information” trend, according to Sam Stovall, chief investment strategist at CFRA Research

“Even though you’re getting better-than-expected results, people may be selling because they just want to take the money and run,” he said. 

The tech sector — which has powered the market rally from 2023 into 2024 — is now trading at a relatively high valuation of nearly 29 times its 2024 earnings, according to Stovall. With this in mind, investors will need to see earnings expansion in order for the tech companies to be able to maintain their elevated price-to-book levels, said the strategist.  

“It’s not that investors will be willing to pay up and have multiple expansion later, but rather — now it’s time to put up or shut up,” Stovall said. “It’s time to increase the earnings to justify these higher valuations.”

The action follows a mixed day for stocks. On Tuesday, the S&P 500 inched down by 0.06%, while the Nasdaq Composite lost 0.76%. The Dow was the outperformer, adding 0.35%.

The Fed’s rate decision will be front of mind for traders on Wednesday. The fed funds futures market has priced in a nearly 98% probability that the central bank will leave rates unchanged, according to the CME FedWatch tool. Investors will be looking for clues on shifts in the central bank’s policy stance in its post-meeting statement and in Fed Chair Jerome Powell’s remarks.

Policymakers will likely adopt a “later and fewer approach,” in which the Fed starts cutting rates later than what most of the market is expecting, said Stovall. 

“The Fed doesn’t want to repeat the mistakes of the past about being too aggressive with the rate cuts,” Stovall said.

On the earnings front, Dow-member Boeing will be releasing its results Wednesday before the bell. Chipmaker Qualcomm is scheduled to announce its quarterly earnings after the close.


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