Major equity index futures pointed toward a lower Wall Street opening on Thursday, retreating from recent weekly advances. Nasdaq-100 contracts tumbled 1.2%, while Dow Jones Industrial Average and S&P 500 futures fell 0.3% and 0.4% respectively. The retreat was driven primarily by an after-hours retreat in shares of Google parent Alphabet, alongside a broader pullback across semiconductor and enterprise software holdings following quarterly disclosures.
While Microsoft exceeded consensus revenue and profit benchmarks driven by Azure cloud expansion, Alphabet missed top-line expectations despite a 103% increase in cloud unit revenue. Investor unease intensified over elevated artificial intelligence infrastructure capital expenditures and near-term free cash flow returns. Tech sector weakness extended to Asian trading sessions and broad chip indices, compounding pressure on benchmark equity gauges.
The United States economy expanded at an annualized rate of 3.4% during the third quarter, surpassing consensus expectations of 3.1% and accelerating from the 2.2% pace recorded in the second quarter, according to data issued Thursday by the Commerce Department. Consumer spending demonstrated ongoing momentum by increasing 0.5% in September, slightly trailing projections of 0.6%, while personal income advanced 0.2% against estimates of 0.3%.
Concurrently, inflationary pressures showed mixed momentum across broad and underlying measures. The headline personal consumption expenditures price index increased 0.5% on a seasonally adjusted monthly basis, bringing the annual advance to 3.6%. Meanwhile, core PCE, which excludes volatile food and energy categories, gained 0.3% over the prior month and 3.1% year over year, aligning with Dow Jones consensus expectations. The economic metrics arrived one day after the Federal Reserve opted to maintain its benchmark target range between 3.75% and 4.00%.
Shell reported third-quarter adjusted earnings of $10.81 billion, nearly doubling the $5.43 billion posted during the corresponding quarter last year and exceeding consensus estimates of $9.92 billion compiled by LSEG. The result marked the group's highest quarterly profit since the second quarter of 2022, bolstered by global fuel supply tightness and elevated crude valuations linked to geopolitical hostilities in the Middle East.
Indicative refining margins reached $42 per barrel, surpassing the previous record of $28.04 per barrel set in mid-2022. Alongside the results, the energy producer expanded its capital return program, launching a $5 billion share repurchase tranche to be carried out over the next three months, compared with $3 billion authorized during the previous quarter, while continuing debt reduction following its $16.4 billion acquisition of ARC.