(Reuters) -U.S. stock index futures wavered on Wednesday as investors treaded carefully through the thick of earnings season, with Netflix's weak profit adding a chill to market sentiment.
Shares of Netflix fell 6.8% in premarket trading as the streaming giant missed Wall Street's third-quarter earnings targets — a rare misstep that has prompted investors to tread cautiously as earnings season hits full throttle.
At 04:59 a.m., Dow E-minis were down 16 points, or 0.03%, S&P 500 E-minis were up 2.25
points, or 0.03% and Nasdaq 100 E-minis were down 27 points, or 0.11%.
Weighing on the Nasdaq futures was an 8.7% drop in Texas Instruments after the chipmaker forecast fourth-quarter revenue and profit below Wall Street estimates.
Peers Microchip Technology dropped 3%, while NXP Semiconductors and ON Semiconductor lost more than 2% each.
With equities hovering near record highs and valuations stretched thin, investors are demanding more than just earnings beats to justify lofty price tags.
Despite strong results from several big names on Tuesday, markets remained indecisive. The S&P 500 ended virtually unchanged, the Nasdaq dipped slightly, while the Dow outperformed, closing up 0.5%.
So far, 78 S&P 500 companies have reported, with 87% beating estimates, according to LSEG data. Analysts expect third-quarter earnings growth of 9.2% year-on-year, up from 8.8% at the start of the month.
All eyes are now on Tesla, which will kick off the 'Magnificent Seven' earnings parade after markets close. Its shares rose 0.4%, while AT&T was flat ahead of its results due before the bell.
"Investors will also be on the alert for further tech tie-ups, such as the recent partnership between chipmaker AMD and OpenAI," Mark Haefele, chief investment officer at UBS Global Wealth Management said.
GEOPOLITICS AND DATA TROUBLES
Geopolitical jitters also loomed. A planned summit between U.S. President Donald Trump and Russian President Vladimir Putin was abruptly put on hold, while uncertainty swirled around a potential meeting with Chinese President Xi Jinping.
Despite recent signs of thawing tensions between Washington and Beijing, Trump reignited doubts on Tuesday, saying the meeting with Xi "maybe won't happen" — injecting fresh uncertainty into an already fragile global sentiment.
With the U.S. government shutdown stalling the release of key economic data, Federal Reserve policymakers may be forced to navigate next week's policy meeting without a full picture of the economy - a risky proposition as internal divisions persist over which threats deserve priority.
Still, Friday's consumer price report could offer some clarity on inflation. September's core CPI is expected to hold steady at 3.1%.
Among other share moves, Alphabet rose 1.3% after a 2.4% fall on Tuesday. Bloomberg News reported Anthropic was in talks with Google to secure additional computing power valued in the high tens of billions of dollars.
(Reporting by Pranav Kashyap in Bengaluru; Editing by Arun Koyyur)
