Nasdaq 100 Forecast: Alphabet Falls on DOJ News, Tech Stocks Under Pressure

U.S. Stock Futures Edge Lower Amid Mixed Market Signals

U.S. stock futures declined slightly on Wednesday following a strong session for major indices. The market is struggling for direction as tech shares faced headwinds and global economic uncertainties weighed on sentiment.

At 13:22 GMT, Dow futures are trading 42368.00, down 7.00 or -0.02%. S&P 500 Index futures are at 5801.25, up 0.75 or +0.01% and Nasdaq futures are trading 20290.50, down 8.00 or -0.04%.

Tech Sector and Corporate Developments Weigh on Markets

Alphabet shares fell about 1% as the Department of Justice moved closer to a potential breakup of Google, citing antitrust concerns. The news added pressure to the tech sector, which had supported the market’s previous rally.

Boeing also faced setbacks, with shares declining 1.8% after it withdrew a pay raise offer amid ongoing labor strikes, prompting S&P Global Ratings to issue a negative outlook on the company’s credit.

Meanwhile, Blackstone slipped nearly 1% following a downgrade by Piper Sandler, citing that the stock’s recent gains had already priced in much of the positive news.

Other corporate movers included Rio Tinto and Arcadium Lithium, which saw divergent price reactions to a $5.85-per-share buyout deal; Rio Tinto dropped 1.2%, while Arcadium surged 30%. Additionally, GitLab rose 5% on a bullish coverage initiation by Morgan Stanley, while Reddit climbed 2% after Jefferies rated it a buy.

China Stocks Face Renewed Pressure

U.S.-listed Chinese stocks extended losses as Alibaba, JD.com, and Nio fell 3.2%, 4.6%, and 2.4%, respectively. The declines followed the absence of significant new stimulus measures from Chinese authorities after a recent holiday.

Broader concerns about China’s economic stability resurfaced, with the Shenzhen Index plunging 8.7%, marking its worst day since 1997, and the Shanghai Composite dropping 6.6%. The sell-off in Chinese equities also affected major U.S.-listed ETFs, with the iShares China Large-Cap ETF sliding 2.3%.

Focus on Economic Data and Fed Minutes

Investors awaited the release of the Federal Reserve’s September meeting minutes, scheduled for 18:00 GMT. These minutes, along with upcoming inflation data, will provide further insights into the Fed’s policy outlook. Market participants are keen to assess whether last week’s robust labor market data strengthens the case for another interest rate hike. Oil prices have retreated recently, providing relief to inflation expectations and fueling optimism that the Fed may be nearing the end of its tightening cycle.

Market Outlook: Cautious Tone Ahead of Earnings Season

While the broader market trend remains slightly upward, volatility could persist as traders digest upcoming economic data and corporate earnings. Historically, October is a volatile month, and with earnings season set to kick off Friday with reports from major banks, further fluctuations are likely.

Short-term risks include heightened volatility from geopolitical factors and renewed concerns about high stock valuations. However, a continuation of favorable economic data could lend support to equities, particularly in sectors with robust earnings growth potential.

Given these factors, a cautious but slightly bullish outlook may be warranted, with potential gains driven by tech and financial sectors if earnings results meet expectations.