Apple Earnings Stocks as Markets Watch Midterm Votes

United States stock futures were mixed on Tuesday as investors digested a disappointing margin outlook from Apple and waited for results from the midterm elections. The Apple earnings stocks story dominated pre-market trading: Apple shares fell about 3.9 percent in pre-market trading after the company warned that rising memory chip costs would pressure its holiday-quarter gross margin, even though its quarterly revenue and earnings beat expectations. Apple Earnings Stocks

Apple reported fiscal fourth-quarter revenue of $114.5 billion, up 12 percent year on year, and diluted earnings per share of $2.10, both topping Wall Street forecasts, according to market reports. But the company forecast a December-quarter gross margin of 45 to 46 percent, down from 47.9 percent in the previous quarter, citing higher memory costs and expenses related to its new Siri artificial intelligence features. Weaker-than-expected iPad sales added to the disappointment.

At 7:07 a.m. Eastern time, Dow E-minis were down 489 points, or 0.94 percent, and S&P 500 E-minis were down 14.75 points, or 0.19 percent, while Nasdaq 100 E-minis were up 36.25 points, or 0.13 percent, Reuters reported. Earlier in the session, futures on all three major indexes had been lower, with the Nasdaq 100 down 0.20 percent, the S&P 500 down 0.25 percent and the Dow down 0.47 percent as of 1:33 a.m. Eastern.

Why Apple earnings stocks fell despite a beat

Apple’s reaction illustrates how demanding the market has become for Big Tech earnings. A beat on revenue and profit is no longer enough if the outlook disappoints, particularly when investors are already questioning whether enormous spending on data centres and artificial intelligence infrastructure will generate sufficient returns. Apple Earnings Stocks

“Investors are increasingly questioning whether the enormous sums being spent on data centers and AI infrastructure can generate sufficient returns, with attention shifting towards profitability, free cash flow and monetization,” Daniela Hathorn, senior market analyst at Capital.com, said in comments reported on Tuesday. Elevated Treasury yields are adding to the pressure by making future earnings less valuable in today’s terms, she added.

Apple was not alone. Palantir Technologies fell 7.7 percent in pre-market trading despite reporting better-than-expected third-quarter results and forecasting fourth-quarter revenue above estimates. The data analytics company reported revenue up 96 percent to $2.3 billion, with US commercial sales rising 148 percent and overtaking government sales for the first time, but investors focused on a sharp deceleration in new contract bookings and concerns about its valuation. Palantir had dropped as much as 8.4 percent in pre-market trading at one point. Apple Earnings Stocks

The Nasdaq 100 closed more than 10 percent below its all-time closing high on Monday, confirming that the tech-heavy index has entered a correction, Reuters reported. The S&P 500 fell 0.5 percent in Monday’s cash session, while the Dow gained 0.4 percent, after an early tech rebound faded into a late-day sell-off.

Apple Earnings Stocks: Midterm elections add to market uncertainty

Investors are also watching Tuesday’s midterm elections closely, since control of Congress will shape expectations for taxes, trade policy, energy regulation and technology policy. Polls and nonpartisan analysts favour Democrats to win the House, while control of the Senate remains uncertain, according to Reuters market coverage. Prediction markets have assigned Democrats roughly a 75 percent chance of gaining control of the Senate, although analysts caution that such markets are not forecasts. Apple Earnings Stocks

Morgan Stanley analysts said in a note earlier this week that the elections should help remove a major market overhang, whatever the outcome, by clarifying the policy path for the rest of the presidential term. JPMorgan, meanwhile, warned that a Democratic sweep of both chambers could trigger weakness in artificial intelligence-related stocks, according to market reports. Societe Generale analysts flagged concerns over government spending and fiscal deficits as another factor for investors to watch. Apple Earnings Stocks

“Today’s US midterm elections introduce another source of uncertainty, particularly for the dollar, Treasury yields and sectors sensitive to fiscal and regulatory policy,” Hathorn said. “Investors will be watching whether the results change expectations for government spending, borrowing and the administration’s ability to advance its economic agenda.”

• Apple revenue reached $114.5 billion in the fiscal fourth quarter, up 12 percent year on year.
• Apple forecast December-quarter gross margin of 45 to 46 percent, down from 47.9 percent.
• Palantir revenue jumped 96 percent to $2.3 billion, yet shares fell 7.7 percent pre-market.
• The Nasdaq 100 closed more than 10 percent below its record high on Monday, entering a correction.

Apple Earnings Stocks: A busy earnings and data calendar

Tuesday is also a busy day for company results and economic data. Advanced Micro Devices is due to report third-quarter earnings after the market closes, with its AI chip business in the spotlight, alongside Arista Networks, Amgen and Booking Holdings. Pfizer, Marathon Petroleum and ADM reported before the open. Investors will also monitor September’s Job Openings and Labor Turnover Survey report and factory orders data, both due on Tuesday.

Oil prices added another moving part: crude rose on Tuesday after reports of a US strike on Iran’s Qeshm Island, reversing part of Monday’s sharp fall. Cheaper oil on Monday had offered some inflation relief, but the renewed rise reminded traders that energy costs remain sensitive to Middle East developments.

For now, the market message is cautious rather than panicked. Futures steadied after their early falls, Apple’s decline was contained to a single-digit percentage, and traders are waiting for two things that will arrive in the coming hours: the first midterm results as polls close, and AMD’s earnings after the bell. Either could set the tone for the rest of the week, as investors judge whether Big Tech’s AI spending is paying off and whether Washington’s policy direction is about to change. Apple Earnings Stocks