Dow Jones Forecast: Industrial Average Slips as Microsoft and Caterpillar Disappoint

S&P 500 Futures Rise as Meta and Tesla Gain, Microsoft and Caterpillar Weigh on Dow

S&P 500 futures are rising Thursday morning as traders digest a wave of earnings reports from major tech and industrial companies. Futures tied to the S&P 500 are up 0.3%, while Nasdaq 100 futures are gaining 0.6%. Dow Jones futures are lagging, slipping 54 points, or 0.1%, as Microsoft and Caterpillar pressure the index.

Meta Platforms and Tesla are both moving higher in premarket trading after reporting earnings. Microsoft is sliding over 4% after issuing disappointing revenue guidance, while Caterpillar is also under pressure following a revenue miss. Meanwhile, fourth-quarter GDP growth came in at 2.3%, missing expectations of 2.5%, adding another layer of caution for investors.

How Are Megacap Tech Stocks Moving?

Meta Platforms is up 1% after beating expectations on both revenue and earnings. Tesla is climbing 2% despite missing estimates, as traders focus on its long-term strategy rather than short-term results.

Microsoft, however, is struggling, falling after forecasting fiscal third-quarter revenue between $67.7 billion and $68.7 billion, short of the $69.78 billion analysts expected. The stock’s decline is weighing on the broader tech sector. Nvidia remains a key focus after dropping 4% in the previous session, adding to concerns about recent weakness in semiconductor stocks.

Apple’s earnings are set for release after the closing bell, with Amazon following next week. These reports will play a crucial role in shaping sentiment around tech stocks.

What’s Dragging the Dow Lower?

Microsoft’s post-earnings drop is a key headwind for the Dow, alongside Caterpillar, which is down 4% after reporting fourth-quarter revenue of $16.22 billion, missing estimates of $16.39 billion. While Caterpillar posted stronger-than-expected earnings per share at $5.14, investors are concerned about the company’s 2025 guidance, which suggests potential weakness in sales and revenue.

UPS is also under pressure, falling over 13% after missing revenue estimates and announcing a deal with Amazon that will reduce its shipping volume by more than 50% by the second half of 2026. However, the stock’s decline is not a major factor for the Dow’s movement.

Which Stocks Are Gaining Ground?

IBM is rallying 8% after surpassing earnings expectations with a profit of $3.92 per share, above the $3.75 consensus. The company pointed to strong demand for AI-driven services, with its generative AI business now exceeding $5 billion in total revenue.

Lam Research is up 6% after delivering an earnings beat, while Coca-Cola is seeing upside after Jefferies upgraded the stock to a “buy” and raised its price target to $75, suggesting a potential 19% gain.

What’s Ahead for Markets?

Traders will be closely watching Apple’s earnings after the bell, as well as upcoming reports from Amazon and other major tech names.

The weaker-than-expected GDP report is fueling speculation about the Federal Reserve’s next move, though policymakers have signaled that rate cuts are unlikely in the immediate future.

With inflation still elevated, market participants will focus on upcoming economic data and corporate guidance to gauge the next steps for the Fed and the broader market.

More Information in our Economic Calendar.