Market movers: Microsoft and Alphabet report earnings, First Republic slips.

The Dow, S&P 500, and Nasdaq 100 futures are all higher, following strong earnings reports from Microsoft and Alphabet. Microsoft’s intelligent cloud division revenue rose by 16% in Q1 2023, beating Bloomberg consensus estimates, while Alphabet’s advertising revenue fell by less than 1%, a better outcome than expected. The results have boosted hopes that digital service demand remains strong amid a potential economic downturn.

Facebook-owner Meta Platforms is expected to report after the close of US trading on Wednesday, with investors keen to see how the company’s recent rounds of cost reduction and job cuts have impacted performance, particularly as sales have dropped over the last three quarters.

First Republic Bank saw its shares slump by almost 50% on Tuesday, as reports suggested that the bank may struggle to shore up its capital position, despite reducing headcount and pursuing strategic options. The bank has reached out to the US government for support, but concerns remain over regulatory criticism and whether further deposit injections from big Wall Street banks are wise.

The UK Competition and Markets Authority is due to release its final report on Microsoft’s proposed $75bn purchase of video game maker Activision Blizzard on Wednesday, after a surprise reassessment last month citing new evidence. The CMA has now said that the deal will not significantly lessen competition in the UK console gaming market, but is still examining cloud gaming.

Oil prices have gained after a sharp fall in the previous session, thanks to a decline in US fuel inventories.