Market Snapshot: U.S. stock futures point to third straight drop on Wall Street


U.S. stock futures on Thursday were pointed to a third consecutive decline, as key tech earnings and a major jobs report loom.

What’s happening

  • Dow Jones Industrial Average futures YM00, -0.16% fell 102 points, or 0.3%, to 35301.
  • S&P 500 futures ES00, -0.24% dropped 13 points, or 0.3%, to 4524.
  • Nasdaq 100 futures NQ00, -0.35% decreased 54 points, or 0.4%, to 15419.

On Wednesday, the Dow Jones Industrial Average DJIA fell 348 points, or 0.98%, to 35283, the S&P 500 SPX declined 63 points, or 1.38%, to 4513, and the Nasdaq Composite COMP dropped 310 points, or 2.17%, to 13973.

What’s driving markets

Investors reacted negatively to a news that private-sector payrolls grew strongly in July, which was seen as denting the possibility that the U.S. Federal Reserve has made its final interest-rate hike of the cycle. Friday will see the U.S. Labor Department release the official nonfarm payrolls report.

There also was the decision by Fitch Ratings to downgrade the U.S. credit rating, even though the move was criticized by observers including former Treasury Secretary Larry Summers and JPMorgan Chairman and CEO Jamie Dimon.

Perhaps most curious was chipmaker Advanced Micro Devices AMD, -7.02%, as its stock ended sharply lower despite an initially positive reaction to its earnings. Tech companies this reporting season have struggled to see positive share-price reaction to their results, which raises the bar for Apple AAPL, -1.55% and AMZN, -2.64%, which each report results after the close.

According to Evercore ISI, the average stock price reaction for the 368 S&P 500 companies so far that have reported results is -0.7%.

“Although the slide is far from suggesting a major trend reversal, if incoming U.S. data, and especially the U.S. jobs report on Friday, forces market participants to raise their implied Fed rate path, the correction may continue for a while longer,” said Charalampos Pissouros, senior investment analyst at XM.

“That said, apart from changes in the macroeconomic and monetary policy outlooks, equity traders will probably pay special attention to earnings results by Amazon and Apple, which are scheduled to be released after the closing bell today.”

Thursday will see data on jobless claims, second-quarter productivity and the Institute for Supply Management services index.

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