Dow Jones futures, along with S&P 500 futures and Nasdaq futures, experienced a rise overnight. Notably, Amazon.com (AMZN) announced their earnings after the market close. The stock market correction escalated on Thursday, with the Nasdaq falling below its 200-day moving average. Although the indexes did recover slightly from the intraday lows, the bounce didn’t last long. The decline was led by tech giants such as Meta Platforms (META), whose concerns about advertising affected Google parent Alphabet (GOOGL), which was already a big loser on Wednesday. Additionally, these concerns impacted Amazon’s stock heading into their earnings results. Meta’s lower-than-expected capital spending plans also had an impact on other big tech companies like Nvidia (NVDA) and Arista Networks (ANET). Apple (AAPL) also faced a decline, breaking below its 200-day line, and Tesla (TSLA) closed further below this key level. Even Microsoft (MSFT), which had notable earnings on Wednesday, lost all the gains it made.
Amazon reported positive earnings, causing their stock to rise 5% after hours. The e-commerce and cloud giant exceeded expectations in terms of earnings and sales, although their Q4 revenue guidance was slightly lower. With regard to Amazon Web Services, their revenue grew by 12%, just missing Q3 views. However, the company sees generative AI as a source of growth for AWS. Earlier in the week, Microsoft reported strong Azure cloud-computing revenue, while Google Cloud disappointed. Amazon’s stock fell to a two-month low in Thursday’s session.
Other companies that reported on Thursday night included Chipotle Mexican Grill (CMG), Ford Motor (F), Intel (INTC), Dexcom (DXCM), Deckers Outdoor (DECK), and Enphase Energy (ENPH). Intel, Chipotle, Dexcom, and Deckers all had solid-to-strong earnings results, while Ford saw a modest decline and ENPH experienced a significant drop. On Friday morning, Exxon Mobil (XOM) and Chevron (CVX) are set to report their earnings. These oil majors have recently experienced a decline due to major takeover deals, as well as the decrease in crude oil and gasoline futures.
Dow Jones futures saw a 0.4% rise, with INTC stock providing a slight boost. S&P 500 futures rose 0.6%, and Nasdaq 100 futures climbed 0.8%. S&P 500 and Nasdaq futures were buoyed by the positive performance of Amazon and Intel stock, while Microsoft, Google, Meta, and Nvidia all increased slightly. The 10-year Treasury bond yield rose slightly to 4.85%, and crude oil futures saw a 1% increase. It’s important to note that overnight action does not always translate into actual trading during regular stock market sessions.
The stock market correction continued to escalate on Thursday, with technology stocks leading the way and Treasury yields experiencing losses. The Dow Jones Industrial Average fell 0.8% in Thursday’s trading session, the S&P 500 index dropped 1.2%, and the Nasdaq composite sold off by 1.8%. The Nasdaq composite also fell below its 200-day line, joining the other major indexes. The Dow Jones reached its lowest level in almost five months, marking the end of its weak attempt at a rally. Market breadth was relatively balanced on Thursday, with winners almost equaling losers. However, the overall trend has been negative. The small-cap Russell 2000 saw a 0.3% increase, having initially jumped over 1% before dropping to a fresh 52-week low before the afternoon bounce. The Invesco S&P 500 Equal Weight ETF (RSP) experienced a 0.2% dip. Although it outperformed the S&P 500, RSP is currently at its lowest levels in nearly a year. The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) fell 1.1% to a five-month low. This performance was slightly better than the Nasdaq 100, which saw a 1.9% decline but remained above its 200-day line. Despite the ongoing correction, some investors held onto their stocks, particularly tech giants, in the hopes that earnings season would revive the market. However, earnings have thus far acted as a negative catalyst. Although the market reached a point where a bounce might have been expected, it only lasted for approximately 90 minutes. The 10-year Treasury yield fell 11 basis points on Thursday to 4.84%, reversing from an early high of 4.98% due to tame inflation data counterbalancing strong Q3 GDP growth. Regardless, the strong upward trend in Treasury bond yields remains intact. U.S. crude oil prices also dropped by 2.55% to $83.21 per barrel.
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) fell by 0.9%. Microsoft stock is a significant component of IGV. The VanEck Vectors Semiconductor ETF (SMH) experienced a 0.9% decrease, with Nvidia stock being its largest holding. Reflecting more speculative story stocks, the ARK Innovation ETF (ARKK) dropped by 1.3%, while the ARK Genomics ETF (ARKG) saw a 0.1% increase. Tesla stock is a major holding across Ark Invest’s ETFs, but is no longer the top holding. The SPDR S&P Metals & Mining ETF (XME) increased slightly by 0.1%, and the SPDR S&P Homebuilders ETF (XHB) rose by 0.9%. On the other hand, the Energy Select SPDR ETF (XLE) decreased by 0.8%, largely due to the massive holdings of CVX and Exxon. The Health Care Select Sector SPDR Fund (XLV) decreased by 1%, and the Industrial Select Sector SPDR Fund (XLI) slipped by 0.4%. The Financial Select SPDR ETF (XLF) experienced a 0.2% dip, while the SPDR S&P Regional Banking ETF (KRE) increased by 3% after hitting a five-month low on Wednesday.
Meta stock fell by 3.7% on Thursday, a 6.6% decrease for the week. GOOGL stock experienced a 9.8% decline this week, with a 2.65% fall on Thursday. Apple stock has lost 3.7% this week, with a decline below its 200-day line and recent lows on Thursday. Nvidia stock only experienced a 2.6% decrease for the week, but hit a five-month low on Thursday. Amazon stock fell by 4.3% through Thursday, nearly reaching its 200-day line. TSLA stock has declined by 2.9% this week, following a dive of nearly 16% the previous week. The shares are now further below the 200-day line but still above Monday’s intraday low. MSFT stock is still up 0.4% for the week, despite a 3.75% slide on Thursday. It is currently the only one of the “Magnificent Seven” stocks to remain above its 50-day line.
