US pre-open: Stocks seen lower after Apple results, ahead of Fed

US futures pointed to a weaker open on Wall Street on Wednesday, with the tech-heavy Nasdaq under the cosh following disappointing results from Apple, as investors looked to the Federal Reserve’s latest rate announcement.

At 1050 BST, Dow Jones Industrial Average and S&P 500 futures were down 0.2%, while the Nasdaq was 1.1% weaker as Apple shares fell 7% in pre-market trade.

Late on Tuesday, the US technology giant’s first-quarter results revealed the first drop in revenue in 13 years as iPhone sales fell for the first time ever.

“Apple’s had its critics from day-one who said that it was a one-trick pony and that iPhone sales couldn’t rise indefinitely, so after 13 years they’ve got it right. Investors will be looking for evidence that this is just a blip caused by tough yearly comparisons because of the launch of the iPhone 6 and that demand will pick up once the new iPhone 7 is released,” said CMC Markets’ Jasper Lawler.

“Nonetheless, it does appear Apple has reached an inflexion point. Apple now needs a new ground-breaking product, like a car, to justify a higher price multiple.”

Elsewhere on the corporate front, Twitter was also sharply lower after its first-quarter revenue of $595m missed analysts’ expectations, while Chipotle Mexican Grill slumped in pre-market trade after reporting its first quarterly loss as a public company.

Boeing, Baker Hughes and United Technologies were among the companies slated to report earnings before the opening bell.

Investors were also exercising caution ahead of the Fed’s rate announcement, which is due at 1900 BST.

“Tonight’s FOMC statement should not provide anything new from a policy standpoint, with markets implying the chances of a rate hike stand at 0% probability, with a cut at 2%,” said Joshua Mahony market analyst at IG.

“The interesting part of today’s meeting will instead be the tone and language with regards to future rate hikes. With markets showing a 21% implied probability of a June hike, the committee will want to align expectations with the likeliness of it happening.”

In terms of data releases, the goods trade balance is at 1330 BST and pending home sales are at 1500 BST.

Oil prices advanced on Wednesday, with West Texas Intermediate up 1.9% to $44.86 a barrel and Brent crude 2.1% firmer at $46.72.