Stock Futures Fall as Disappointing Meta Outlook Dampens Nasdaq’s Massive Gain

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Traders are worried about tech stocks after Meta issued disappointing quarterly results and outlook.

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Spencer Platt/Getty Images

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US stock futures were falling Wednesday evening as F acebook parent Meta forecast third-quarter results that underwhelmed Wall Street expectations and weighed on the tech-heavy Nasdaq Composite.

Earnings news, an update to Spirit‘s
merger saga, and an unexpected change of position from Sen. Joe Manchin on the Congressional climate package filled Wednesday afternoon with headlines, sending broad groups of stocks in different directions during after-hours trading. Solar tickers, as well as hydrogen fuel-cell developer Plug Power (ticker: PLUG ), led companies on the rise now that Manchin appears willing to support a federal climate and tax package, while downbeat guidance from Meta ( META ), as well as Qualcomm ( QCOM ) and Best Buy ( BBY ), moderately hurt the tech and retail sectors.

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During the session, traders reacted positively to comments from Federal Reserve Chair Jerome Powell during a Wednesday afternoon press conference, which followed the Fed’s decision to raise its target federal-funds rate by another three quarters of a percent. The Nasdaq gained 4.1% in its largest single-day percentage gain since April 6, 2020, while the S&P 500 rose 2.6% and the Dow Jones Industrial Average finished up 1.4%.

Stocks were already enjoying a strong day when Powell began answering questions from reporters at 2:30 pm, at which point the indexes soared. More than 90 companies in the Nasdaq-100 recorded gains.

At 6:30 pm Eastern time, futures for the S&P 500, Dow Jones Industrial Average, and Nasdaq were down 0.1%, 0.1%, and 0.4%, respectively.

Spirit ( SAVE ) and Frontier Airlines called off their merger Wednesday afternoon, though Spirit plans to continue speaking with JetBlue Airways ( JBLU ), which launched an opposing bid. JetBlue was down 1.5%, while Spirit was up 2.3%. Shares of Frontier’s parent Frontier Group Holdings (ULCC) were more or less unchanged in after-hours trading.

Meanwhile, Sen. Manchin’s sudden support for a climate and energy spending package caused renewable-energy tickers to shoot up Wednesday evening. Plug Power was up more than 11%, as the news also boosted Shoals Technologies Group ( SHLS ), up 9.8%, and solar stocks Sunrun ( RUN ) and First Solar ( FSLR ), which rose 7.6% and 6.8%, respectively.

Ford (F) was another big after-hours gainer, rising 6.4% after reporting earnings of 68 cents a share, far beyond Wall Street expectations for 45 cents per share.

Meta, which behind Ford was trading at the second-highest after-hours volume Wednesday, was down 4.5% after its second-quarter revenue of $28.82 billion fell 1% from a year ago. Its guidance for the third quarter specifies revenue between $26 billion and $28.5 billion, which missed the Street’s consensus estimate for $30.7 billion.

ServiceNow ( NOW ), the workflow software management company, was also down 7.5% after cutting its full-year guidance; however, its most recent quarterly profits of $1.62 per share beat estimates.

An advance release on US gross domestic product for the second quarter arrives Thursday morning. The expectation is for 0.8% positive GDP growth compared with the prior quarter, according to FactSet.

Apple (AAPL) and Amazon (AMZN) report earnings after the bell Thursday, while Mastercard (MA), Pfizer (PFE), Merck (MRK), Thermo Fisher (TMO), and Comcast (CMCSA) disclose results before the market opens.

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