Stock-index futures in the U.S. experienced a decline on Thursday as shares in Meta retreated following their latest results. In addition, bond yields remained near their recent highs.
How Stock-Index Futures Are Trading
- S&P 500 futures (ES00, -0.68%) dipped 28 points, or 0.6%, to 4181.
- Dow Jones Industrial Average futures (YM00, -0.37%) fell 109 points, or 0.3%, to 33041.
- Nasdaq 100 futures (NQ00, -1.05%) dropped 139 points, or 1%, to 14339.
On Wednesday, the Dow Jones Industrial Average (DJIA) fell 105 points, or 0.32%, to 33036. The S&P 500 (SPX) declined 61 points, or 1.43%, to 4187, while the Nasdaq Composite (COMP) dropped 319 points, or 2.43%, to 12821.
Poor Earnings Continue to Weigh on Markets
Early trading on Thursday was impacted by poorly received earnings from some major technology companies. In the previous session, the Nasdaq Composite saw its largest daily drop since February following nearly a 10% fall in Alphabet's (GOOG) shares in reaction to their results.
This decline led the tech-heavy benchmark to experience a loss of 10.7% since reaching a recent high in mid-July. Technical analysts consider a double-digit retreat from a high to be a market correction.
Furthermore, the new day is expected to bring additional losses as shares of Meta Platforms (META) shed nearly 4% in premarket action after their earnings presentation late on Wednesday. Next in line among big tech companies is Amazon.com (AMZN), which will report its earnings after Thursday’s market close.
Market Recalibration Amid Rising Real Yields
Analysts at Saxo Bank noted, "This morning risk-off has continued. One driver seems to be the market recalibrating technology valuations amid rising real yields, and that cycle could go on for a while."
Treasury Yields Rise as U.S. Economy Stays Strong
The 10-year Treasury yield (BX:TMUBMUSD10Y) came close to reaching 5% early Thursday, briefly retreating afterwards. Despite the Federal Reserve's interest rate hikes, the U.S. economy has been displaying resilience, leading to borrowing costs remaining just below a 16-year high.
According to Stephen Innes, managing partner at SPI Asset Management, this positive economic news has its drawbacks for stocks, as the booming housing market contributes to a higher rate environment.
Focus on U.S. Economic Updates
Traders are now eagerly awaiting the release of several key U.S. economic indicators on Thursday. Set to be unveiled at 8:30 a.m. Eastern, these updates include third-quarter GDP, weekly initial jobless claims, as well as September data on durable goods orders, trade balance in goods, and wholesale and retail inventories. In addition, pending home sales for September will be published at 10 a.m.
Dollar Strength Increases as Treasury Yields Rise
As Treasury yields continue to climb, traders are flocking towards the U.S. dollar. This surge has propelled the dollar significantly above 150 Japanese yen (USDJPY), reaching its highest level in 12 months. Furthermore, the dollar index (DXY) has also reached an 11-month peak. While a stronger dollar can pose challenges for U.S. corporations with significant foreign sales, it is seen as a positive indicator in the current market environment.
Earnings Reports and Strike Resolution
On Thursday, various companies will be reporting their earnings. UPS (UPS), Northrop Grumman (NOC), and Merck (MRK) will release their financial results before the opening bell on Wall Street. Chipotle (CMG), Intel (INTC), and Ford Motor (F) will follow suit after the market closes.
In related news, the United Auto Workers have announced that they have reached an agreement to end the strike at Ford.
Digital World Acquisition (DWAC) has delayed its shareholder vote to extend the merger deadline with Trump Media & Technology Group. The vote has been reschedul...
Fast-food chain Chick-fil-A settles lawsuit by paying customers $4.4 million in rebates for increased prices of delivered food without notification.
The labor market remains stable as worker filings for unemployment show a slight increase. Despite this, job and wage gains continue to occur, while potential i...