US STOCKS-Wall Street set for subdued open after mixed tech earnings, Fed comments

U.S. stocks were on track for a softer open on Thursday after mixed earnings reports from large technology firms and comments from Federal Reserve Chair Jerome Powell that sowed doubts about further rate cuts this year. Meta Platforms fell 9.8% premarket after a near $16 billion one-time charge gutted its third-quarter profit, while its management signaled 2026 capex would be "notably larger."

Microsoft slipped 2.4% as it cautioned capital expenditures will rise this year, reversing earlier guidance for moderation and stoking worries about the mounting cost of AI. In contrast, Alphabet jumped 7.8% after robust AI demand powered better-than-expected results.

U.S. stocks soared to record highs on Wednesday after AI bellwether Nvidia became the first company to surpass $5 trillion in market value. Meanwhile, the Fed delivered a widely expected quarter-point rate cut on Wednesday, but Powell surprised markets by casting doubt on the prospects of a rate cut in December, pushing the main indexes to wipe out intraday gains and close largely flat.

Traders quickly pared back the odds of another similar-sized move in December to about 70%, down from roughly 90% earlier in the week. "Markets' immediate reaction has been to see the FOMC meeting as hawkish – with simultaneous selling of bonds, gold, and equities," said Matt King, founder of Satori Insights.

"This reaction is unsurprising." Markets will turn to upcoming results from other "Magnificent Seven" members Apple and Amazon, due after the closing bell on Thursday.

Eli Lilly rose 3.7% after raising its full-year profit and revenue forecasts, while Merck & Co fell 1.4% despite posting higher third-quarter revenue. Of the 222 companies in the S&P 500 that have reported so far, 84.2% have posted earnings above estimates, according to LSEG data as of Wednesday. That is above the 77% average from the past four quarters.

Chipotle Mexican Grill tumbled over 18% after the burrito chain axed its annual sales forecast, with tariffs and inflation squeezing margins. At 08:41 a.m., Dow E-minis were down 168 points, or 0.35%, S&P 500 E-minis were down 22.25 points, or 0.32%and Nasdaq 100 E-minis were down 128.75 points, or 0.49%.

U.S. President Donald Trump claimed a breakthrough with Chinese counterpart Xi Jinping on rare earths and tariffs. Trump agreed to roll back some tariffs on Chinese imports in exchange for Beijing resuming soybean purchases, keeping rare earth exports flowing, and cracking down on fentanyl trafficking. However, investors were cautious about cheering the deal as previous trade negotiations between the two largest economies have seen promising starts followed by setbacks.

Shares of rare earth miners rose, with MP Materials up 4.6%, USA Rare Earth advancing 6.1% and Critical Metals rising 11%.