Stock futures are mixed as Big Tech earnings roll in, Fed decision looms

U.S. stock futures are mixed on Wednesday as investors digested major technology earnings and geared up for the latest Federal Reserve policy announcement.

S&P 500 futures hovered above the flatline while Nasdaq 100 futures traded lower by about 0.2%. Dow futures fell 59 points.

Google parent Alphabet reported better-than-expected earnings after the bell on Tuesday, sending shares of the tech giant up more than 5% in premarket trading. Alphabet saw its revenues grow 34% from a year ago.

Meanwhile, Microsoft shares dipped about 2% in early trading even after the company topped analyst earnings. Microsoft had its largest revenue growth since 2018, thanks in part to gains in PC sales resulting from coronavirus-driven shortages last year.

Shares of AMD and Visa were higher in early trading after better-than-expected results.

Boosting sentiment about the economic recovery from the pandemic, Starbucks raised its full-year outlook as U.S. same-store sales growth returns to pre-pandemic levels. Starbucks shares were 1.5% lower in the premarket however.

On Tuesday, the major averages traded around the flatline. The Dow Jones Industrial Average rose just 3 points. The S&P 500 closed flat after notching an all-time high on Monday. The Nasdaq Composite was the relative underperformer, dipping 0.34% as Tesla fell 4.5%.

Technology darlings Apple and Facebook both report earnings on Wednesday after the bell.

“Many FAANGs are reporting this week and the stock market may wait until some of these key reports are out before deciding on its next major direction,” said Jim Paulsen, The Leuthold Group chief investment strategist.

The Fed wraps up its two-day policy meeting on Wednesday. The central bank is not expected to take any action, but economists expect it to defend its policy to let inflation run hot on a temporary basis. Fed Chairman Jerome Powell will hold a press conference at 2:30 p.m. ET, 30 minutes after the decision is announced, and those comments could move markets.

“Any clues offered in the board’s statement or in the subsequent press conference about potential QE tapering — when and how fast — would likely move both the stock and bond markets,” Paulsen said.

Boeing, Ford, Qualcomm, eBay and MGM Resorts are among the other major corporate earnings on Wednesday.

Elsewhere, President Joe Biden is set to unveil later on Wednesday a $1.8 trillion plan in new spending and tax credits geared toward helping families. The Biden administration’s new spending plan would hike the top income tax rate to 39.6% for the wealthiest Americans and raise taxes on capital gains to 39.6% for households making more than $1 million, according to senior administration officials. Stocks took a hit initially last week when reports of this tax hike began to surface.