The stock market has given investors some relief over the past several days, with major indexes bouncing sharply from the losses they had seen earlier in the month. However, it looked as though some of the wind got taken out of Wall Street's sails on Wednesday morning, as stock futures were broadly lower. The Nasdaq Composite (^IXIC -0.07%) took the brunt of the hit, as futures traded lower by nearly 2% as of 8 a.m. ET.

The Nasdaq is a hotbed of innovation, boasting hundreds of small companies vying to disrupt their respective industries. Yet a handful of trillion-dollar giants still dominate the index, and investors in two of them got news that sent their share prices sharply lower. The impact of what Microsoft (MSFT -0.18%) and Alphabet (GOOGL 1.08%) (GOOG 1.06%) said rippled across the Nasdaq Wednesday morning, and market participants are examining the latest financial results from the two tech stocks to try to divine what could happen to other businesses in tech and elsewhere.

Microsoft's business looks strong, but the stock sells off anyway

Shares of Microsoft were down more than 6% in premarket trading on Wednesday. The move came amid mixed results for the fiscal first quarter that ended Sept. 30, which featured solid revenue growth but ongoing pressure on profits.

Microsoft reported revenue of $50.1 billion for the quarter, up 11% from year-ago levels but down by more than 3% from the quarter that ended June 30. Moreover, net income took a 14% hit to $17.6 billion. That worked out to earnings of $2.35 per share, which was better than expected but still 13% lower than last year's figures.

A number of things stood out in the report. The strong U.S. dollar took its toll on Microsoft's numbers, pushing down revenue growth by 5 percentage points and hitting earnings by 6 percentage points. Also, Microsoft has relied on growth in its cloud computing business to help drive the company's overall results, and the company saw continued strength there, with the Intelligent Cloud segment getting a 20% sales gain on a 35% rise in revenue from Microsoft Azure and other cloud services.

Still, investors seemed most focused on the fact that even the growth rates in the healthiest areas of Microsoft's business are starting to slow. To them, that calls into question the thesis that cloud computing is resistant to the business cycle, and that resulted in sizable declines in the shares of many cloud-services specialists Wednesday morning as well.

Alphabet falls on advertising slowdown

Meanwhile, Alphabet shares also fell sharply, declining nearly 7%. The online search leader released third-quarter results that confirmed the fears of a slowdown that investors had foreseen in the online advertising industry.

Like Microsoft, Alphabet's financial results for the quarter were mixed. Revenue continued to rise but at a much slower pace, coming in at $69.1 billion, up 6% year over year. However, operating margin plunged on higher costs, and that sent net income down 27% to $13.9 billion. Alphabet posted earnings of $1.06 per share, down from $1.40 per share a year ago.

All eyes were on Alphabet's advertising businesses, and they showed signs of weakness. The Google Search division managed to post slight gains of 4% from year-ago results, but ad revenue from YouTube and the Google Network were both lower year over year. Moreover, although Google Cloud led the way higher on the sales front with 38% gains, the key unit still represents less than 10% of Alphabet's overall revenue.

Shareholders have anticipated Alphabet's ad weakness, sending the stock back to levels from early 2021. In the long run, the tech giant's dominance remains solid, but investors still need to be prepared for volatility as short-term traders assess the impact of a sluggish economy in the months to come.