Nasdaq 100 futures were lower on Friday after disappointing earnings from Amazon added to an already pressured index.
Nasdaq-linked futures fell 1.2%, Dow Jones Industrial Average futures fell 0.2% and S&P 500 futures fell 0.7%.
Amazon led losses in premarket trading, plunging 13% after the company reported quarterly revenue that missed expectations and issued disappointing fourth-quarter sales guidance.
Apple shares were also initially lower in extended trading after the company reported weaker-than-expected iPhone revenue, but have since reversed course higher, finishing up about 0.7%. The company’s quarterly earnings and revenue still beat Wall Street expectations.
Tech stocks were once again a dark cloud for the market on Thursday. The Nasdaq Composite fell 1.6% as Meta and other tech stocks tumbled after disappointing results from Facebook’s parent company. Meanwhile, the Dow rose 194.17 points, or 0.6%, for a fifth day, helped by GDP data that suggested inflation may be weakening.
The stock market crashed this week as investors dumped tech stocks after weak results and prospects from Microsoft, Alphabet and Meta in favor of economically sensitive stocks that could benefit if the U.S. economy can stave off a recession. The Dow and S&P are set to gain about 3% and 1.5%, respectively, this week. The Nasdaq Composite closed down about 1%.
Liz Young, head of investment strategy at SoFi, said the pain investors felt in earnings was inevitable and necessary to move forward in the current cycle.
“We’ve been waiting for this to happen,” she said on CNBC’s “Closing Bell: Overtime.” “There’s usually a chain of events: first the market goes down, then earnings goes down, then the economy goes down. So that’s ultimately the part where we see earnings hit, and I don’t think there’s anything wrong with tech taking the hit the most. Tech is this Something the market is under pressure from the start.
“It’s just another check on the list of things we need to get done before we can actually complete this part of the cycle,” she added.
Friday brought a quiet day for earnings. If investors digest the carnage in the tech industry, they’ll see Chevron and ExxonMobil and AbbVie and Colgate-Palmolive before the bell.
On the economic data front, traders look to the Fed’s preferred inflation gauge, the personal consumption expenditures price index, as well as data on consumer confidence and pending home sales.