On Friday, U.S. index futures fell sharply following downbeat forecasts from Amazon and Intel, with investors awaiting a crucial jobs report for further clues on the labor market amid lingering concerns over an economic slowdown.
Amazon.com (NASDAQ: AMZN) slumped 8% in premarket trading after the company reported slowing online sales growth in the second quarter and said cautious consumers were seeking out cheaper options for purchases.
Apple (NASDAQ: AAPL) slipped 0.8% amid a broader weakness in megacap stocks, even as it posted better-than-expected third-quarter iPhone sales and forecast more gains betting on AI to attract buyers.
Other megacaps such as Microsoft (NASDAQ: MSFT), Tesla (NASDAQ: TSLA), and Alphabet (NASDAQ: GOOG, NASDAQ: GOOGL) dropped more than 1% each. Meta Platforms (NASDAQ: META) edged 0.8% lower after soaring on Thursday following upbeat results.
At 8:41 a.m. ET, Dow e-minis were down 232 points, or 0.57%, S&P 500 e-minis were down 52.5 points, or 0.96%, and Nasdaq 100 e-minis were down 301.25 points, or 1.58%.
Concerns around the dominance of the “Magnificent Seven” group of stocks on Wall Street persist as earnings from most of these Big Tech companies have failed to enthuse investors, underscoring the narrative of their valuations being overstretched.
Wall Street’s “fear gauge” breached the long-term average level of 20 points for the first time since mid-April.
Among other major earnings, Intel tumbled 21% after forecasting third-quarter revenue below estimates and suspending its dividend starting in the fourth quarter.
Other chip stocks such as Nvidia, Qualcomm, Broadcom, Micron Technology, and Arm Holdings dropped between 2% and 5.4% and were set to extend losses from Thursday.
All the major three indexes kicked off August with steep declines on Thursday after a round of economic data spurred fears of a faster-than-expected economic slowdown with the U.S. Federal Reserve maintaining a restrictive monetary policy.
The benchmark S&P 500, the tech-heavy Nasdaq, and the blue-chip Dow are on track to log losses for the week that had the Fed opening the door to a September interest rate cut, Big Tech earnings, and a raft of economic data.
All eyes are on the nonfarm payrolls reading at 8:30 a.m. ET for further signs that the U.S. labor market is easing. The data is expected to show nonfarm payrolls increased by 175,000 jobs in July, according to LSEG, after advancing by 206,000 jobs in June.
Snap (NYSE: SNAP) lost 18% after forecasting current-quarter results below expectations, while payments firm Block climbed 6% after raising its forecast for annual adjusted core earnings and unveiling a $3 billion buyback plan.
Software company Cloudflare (NYSE: NET) jumped 7% after raising its annual results forecast.
Of the 342 S&P 500 companies that have reported earnings for the quarter, 79.2% beat expectations, according to LSEG data.
(Source: Reuters)
Jennifer Tacker is a staff writer at ABBO News. She holds a B.A. from the University of Waterloo and a B.Ed from Western University. Jennifer has been active in the stock market and crypto sector for a decade. She specializes in technical analysis and trading strategies.
