Stock futures fall on earnings reports, Chipotle slumps

U.S. stock futures fell in early trading Wednesday after another bout of earnings results hit traders' desks while the previous sessions lost momentum.

Futures tied to the S&P 500 GSPC dropped 0.3%, while futures on the Dow Jones Industrial Average DJI fell by about 80 points, or 0.2%. Contracts on the technology-heavy Nasdaq Composite IXIC were off by about the same margin.

Microsoft MSFT shares rose 1.7% before the open Tuesday after a 4% advance over enthusiasm for a new version of its Bing search engine, which is powered by a more powerful version of OpenAI's popular ChatGPT natural language AI technology.

Under Armour UA jumped 3% in pre-marking trading after the athletic apparel retailer lifted its profit forecast Wednesday morning, benefitting from discounts during the holiday season.

The last three months of 2022 beat expectations, and the company's CEO, Dara Khosrowshahi said the company was focused on profitability in 2023, because of the post-pandemic demand for ride-hailing.

The shares of Chipotle CMG sank nearly 5% ahead of the open after the burrito-marker's earnings disappointed as higher costs for tortillas, dairy, beans and rice, as well as labor costs weighed into profitability.

CVS Health CVS shares rose by 1.6% in extended trading after the pharmacy chain announced it will buy Oak Street Health in a $10.6 billion deal, marking the second big acquisition in the health-care industry in the past two years.

Enphase Energy's ENPH stock rallied 9% after the company reported fourth-quarter results that blew past analyst expectations.

The moves Wednesday morning came after investors cheered on Federal Reserve Chair Jerome Powell's speaking engagement in Washington D.C. in which he embraced the presence of disinflation in the U.S. economy. The S&P 500 gained 1.3%, the Dow 0.7% and the Nasdaq 1.9% on Tuesday.

DataTrek's Nicholas Colas notes that Powell's comments did not sway the market's expectations of the likely path of monetary policy this year. Colas pointed out that the rate-sensitive two-year Treasury yields were unchanged after the speech, and federal funds futures were at 4.50 -- 4.75% indicating policy rates over the coming 24 months could remain where they are now.

Yesterday afternoon s equity market rally shows markets like Powell's slow and steady approach to monetary policy, Colas said. He could have used Friday's jobs report as an excuse to signal more aggressive policy action in March, but he did not.