US futures fall on Fed comments, mixed Big Tech results, US-China trade deal

The Fed delivered the expected quarter‑point cut yesterday, but flagged gaps in official data amid the federal shutdown, which could impact its future decisions.

Chair Jerome Powell said policymakers may turn more cautious if jobs and inflation data stay scarce.

Powell’s comments prompted traders to unwind some bets on another similar-sized move at the Fed’s December meeting to about 70% from 90% earlier this week.

Investors digested a mixed set of Big Tech earnings, with Meta Platforms falling 8.8% in premarket trading and Microsoft slipping 2.6% on concerns of mounting spending on AI.

The Instagram-parent stunned investors with a near US$16 billion one-time charge that gutted its third-quarter profit. It also flagged 2026 capex as “notably larger” next year.

Microsoft cautioned that capital expenditures will increase this year, reversing its earlier forecast of moderation.

In contrast, Alphabet jumped 7.2% after strong AI demand powered better-than-expected quarterly results.

“Megacap earnings and the AI theme should be dominant factors for the S&P 500 and risk assets.

“It would take a very strong hawkish shift in Fed rate expectations to derail the risk asset rally,” said Ryan Wang, US economist at HSBC.

Heavier spending signals from all three companies, combined with stretched valuations and a hawkish Fed tone, have prompted investors to pause after record peaks.

Among other earnings-related moves, Chipotle Mexican Grill tumbled over 19% after the burrito chain axed its annual sales forecast, with tariffs and inflation squeezing margins.

Markets will also turn to upcoming results from other ‘Magnificent Seven’ members Apple and Amazon, due later in the day.

Nvidia’s march to the US$5 trillion milestone helped Wall Street’s main indexes notch record highs in the previous session before Powell’s comments tempered some rate-cut expectations.

At 6.47am, Dow E-minis were down 153 points, or 0.32%, S&P 500 E-minis were down 5.25 points, or 0.08% and Nasdaq 100 E-minis were down 31 points, or 0.12%.

Trade deal made, details awaited

US President Donald Trump claimed a breakthrough with Chinese counterpart Xi Jinping on rare earths and tariffs after a nearly two-hour meeting today.

Trump agreed to roll back some tariffs on Chinese imports in exchange for Beijing resuming soybean purchases, keeping rare earth exports flowing, and cracking down on fentanyl trafficking.

China agreed to pause export controls on rare earths that would last for a year, the country’s commerce ministry said in a statement.

Shares of rare earth miners rose, with MP Materials up 3.3%, USA Rare Earth advancing 4.7% and Critical Metals rising 6.7% in premarket.