US pre-open: Sell-off to continue as Meta results underwhelm

(Sharecast News) - US stock futures were pointing to a further sell-off on Wall Street on Thursday as Meta Platforms joined Alphabet in underwhelming the market with quarterly earnings. Facebook and Instagram owner Meta beat analysts' forecasts - much like Alphabet - but failed to impress with its fourth-quarter guidance and comments about a "softening" ad market. Despite the company reporting its highest operating margin in two years, shares were down 2.5% in pre-market deals.

After heavy selling pressure on Wednesday - which saw both the Dow Jones Industrial Average and S&P 500 drop to a five-month low and the Nasdaq sink 2.4% as shares of tech giant Alphabet tumbled 10% - markets are expected to open firmly in the red.

Dow futures were down 0.4% in pre-market trade, the S&P 500 was 0.7% lower, while the Nasdaq slumped 1%.

"When you consider the negative reaction to Meta Platforms' warning of weaker ad spend, despite, like Alphabet, posting better-than-expected earnings, then hopes big US tech might continue to drag markets higher on its back are starting to look increasingly forlorn," said AJ Bell head of financial analysis Danni Hewson.

"It is notable that, thanks to their extremely strong run, beating earnings expectations is not, in itself, proving enough to support share prices. Investors are looking beyond the headlines to see just how healthy the outlook really is for these businesses."

Thursday will see the release of third-quarter US GDP figures at 0830 ET, with analysts expecting a pick-up in annual economic growth to 4.2%, from 2.1% in the second quarter, though any surprise to the upside will likely be taken badly by markets.

Initial weekly jobless claims are forecast to increase to 208,000 in the week to 20 October, from 198,000 the week before.

Meanwhile, durable goods orders and pending home sales are also due out.

On Friday, the much-anticipated personal consumption expenditures index - the Fed's preferred measure of inflation - is forecast to show that core inflation slowed to an annual rate of 3.7% in September from 3.9% in August.