Aug 2 2024: U.S. stock index futures experienced a sharp decline on Friday, extending recent losses due to disappointing earnings from tech giants and growing concerns about economic slowdown.
As of 06:30 ET (10:30 GMT), Dow Jones Futures fell 380 points, or 0.9%, S&P 500 Futures dropped 59 points, or 1.1%, and Nasdaq 100 Futures slumped 295 points, or 1.6%.
Wall Street indices closed significantly lower on Thursday following a softer-than-expected ISM report on U.S. manufacturing, which heightened recession fears.
The S&P 500 dropped 1.4%, the NASDAQ Composite fell 2.3%, and the Dow Jones Industrial Average slumped nearly 500 points, or 1.2%.
Tech Giants Disappoint: Intel, Amazon Lag Behind While Apple Exceeds Expectations
Investor sentiment was further dampened by disappointing earnings from Amazon (NASDAQ
) and Intel (NASDAQ
), overshadowing the positive performance from Apple (NASDAQ
).
Chipmaker Intel saw its stock plummet over 20% premarket as its June quarter earnings missed estimates. The company also announced it would suspend its dividend and cut 15% of its workforce as part of a turnaround strategy.
Amazon’s stock fell more than 8% after the e-commerce giant provided a weaker-than-expected revenue outlook and warned of slowing online sales due to consumer caution.
Apple’s stock remained relatively unchanged after reporting stronger-than-expected revenue and profit for the June quarter. Despite slightly better-than-expected iPhone sales, overall device sales declined from last year amidst increasing competition in China.
Payrolls Data in Focus Amid Economic Slowdown Concerns
A series of economic data has raised fears of a faster-than-anticipated economic slowdown, amid concerns that the U.S. Federal Reserve’s restrictive monetary policy may have persisted too long.
Attention now shifts to the July official jobs report, with investors seeking further indications of easing in the U.S. labor market.
Economists expect the U.S. economy to have added 177,000 jobs in July, down from 206,000 in the previous month. The unemployment rate, which has increased over the past three months, is expected to remain steady at 4.1%.
Crude Prices Edge Up But Face Weekly Losses
Crude prices rose slightly on Friday but are on track for a fourth consecutive week of losses due to mounting concerns over slowing economic growth.
By 06:30 ET, U.S. crude futures (WTI) climbed 0.3% to $76.50 a barrel, while Brent crude rose 0.3% to $79.72 a barrel.
Both benchmarks have declined around 8% over the past four weeks, as disappointing economic data from top oil importer China and weak manufacturing activity across Asia, Europe, and the United States have raised concerns about global economic growth and oil consumption.
These weak economic indicators overshadowed heightened Middle East tensions following the killing of a Hamas leader in Iran earlier in the week.
The Organization of Petroleum Exporting Countries and allies (OPEC+) made no changes to their production policies after an online meeting on Thursday, reiterating the possibility of pausing plans to increase output from October.
