On Wednesday, the Reuters-Nasdaq futures fell more than 1% as Microsoft led declines in tech stocks after it forecast current-quarter cloud revenue below Wall Street estimates.
Microsoft Corp shares fell 2.1% in the premarket trading after it warned that growth in its cloud business could stall, while its PC unit continues to struggle, as it helped the company meet analysts' expectations in the second quarter.
Other large growth stocks, including Amazon.com Inc, Tesla Inc, Apple Inc., and Alphabet Inc, also fell between 1% and 2%.
After a batter last year, growth stocks have enjoyed a bounce in January, with investors focused on earnings reports to assess the impact of the Federal Reserve's rate hikes and to gauge whether the renewed enthusiasm for such stocks will be sustained.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, wrote a client note in a client note that Microsoft is dealing with a slowdown in personal computing revenues.
Microsoft was hit with a network outage that disrupted its cloud platform, Azure, along with services such as Teams and Outlook, which could affect millions of users around the world.
E-minis were down 215 points, or 0.64%, S&P 500 e-minis were down 31.75 points, or 0.79%, and Nasdaq 100 e-minis were down 140.25 points, or 1.18%, according to the Dow.