Nasdaq futures fall after weak Amazon guidance adds pressure to tech rout
Traders on the floor of the NYSE, October 21, 2022.
Source: NYSE
Nasdaq 100 futures were lower on Thursday evening after disappointing Amazon earnings added to the already pressured index.
Futures linked to the Nasdaq fell 0.6 percent. Dow Jones Industrial Average futures fell 0.5%, and S&P 500 futures lost 0.07%.
Amazon led the decline in expanded retail, plunging after the company posted weaker-than-expected quarterly earnings and issued disappointing fourth-quarter sales guidance.
Apple shares were also initially lower after the company reported weaker-than-expected iPhone revenue, but they have since turned higher. The company continues to beat Wall Street estimates for quarterly revenue and earnings.
Technical names were also a dark cloud over the market in ordinary trade. Earlier in the day, the Nasdaq Composite lost 1[ads1].6%, due to a rout in the Meta and other tech stocks, and the S&P 500 fell 0.6%. Meanwhile, the Dow rose 194.17 points, or 0.6%, for its fifth straight day of gains, helped by GDP data that suggested inflation may be easing.
SoFi head of investment strategy Liz Young said the pain that investors are feeling 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 sequence of events: First the market goes, then the earnings go, then the economy goes. So this is finally the part where we see the earnings get hit, and I don’t think there’s any mistake that it’s technology that gets hit mostly. Technology is what has been under pressure in this market since its inception.”
“This is just another check on the list of things we need to get through before we can really finish this part of the cycle,” she added.
The Dow and S&P are on pace to end the week higher by around 3% and 1.5% respectively. The Nasdaq is set to end slightly lower.
Friday brings a quieter day for earnings. As investors digest the tech carnage, they want Chevron and Exxon Mobil on deck before the bell, as well as AbbVie and Colgate-Palmolive.
In economic data, traders look to the personal consumption expenditures price index, the Federal Reserve’s preferred inflation gauge, as well as consumer sentiment and pending home sales.