U.S. stock futures are trending down in pre-market trading this Friday, as investors monitor Netflix‘s results and service disruptions at Microsoft (NASDAQ:MSFT) and CrowdStrike (NASDAQ:CRWD). Other factors influencing the market include the recent rotation favoring indices like the Dow and Russell 2000, but penalizing major tech stocks, affecting the S&P 500 and Nasdaq. Additionally, the anticipation surrounding major companies’ earnings reports and political uncertainty related to the campaigns of Donald Trump and Joe Biden are increasing volatility and contributing to market downturns.
As of 5:30 AM, Dow Jones futures (DOWI:DJI) fell by 129 points, or 0.31%. S&P 500 futures lost 0.24%, and Nasdaq-100 futures declined by 0.34%. The yield on the 10-year Treasury notes was at 4.197%.
In the commodities market, oil prices are heading for a second consecutive week of losses. Concerns over global demand have outweighed the impact of a drop in U.S. oil inventories and the potential for a Fed interest rate cut in September. Additionally, two major oil tankers collided and caught fire near Singapore, resulting in two crew members being hospitalized and others rescued by lifeboats. The incident occurred 55 km from Pedra Branca island, involving the tankers Hafnia Nile and Ceres I. All crew members were accounted for.
Iron ore futures prices fell over the week, affected by lack of stimuli from China and weak steel demand. On the Dalian Commodity Exchange, the most traded September contract closed down 2.54% from the previous week. In Singapore, the August iron ore also fell, marking the biggest weekly drop since June. High stock levels at Chinese ports and low land sales indicate weak demand and strong supply, while recent Chinese policies have not brought significant changes, increasing economic uncertainties.
West Texas Intermediate crude for August fell 0.18% to $82.67 a barrel. Brent crude for September dropped 0.04%, near $85.11 a barrel. The most traded iron ore contract on the Dalian Commodity Exchange (DCE) dropped 0.19% to $110.72 per metric ton.
Asia-Pacific markets had a predominantly down Friday. Japan’s Nikkei 225 fell 0.16%, while Hong Kong’s Hang Seng dropped 2.02%. In South Korea, the Kospi was down 1.02%, but the Kosdaq rose 0.76%. Taiwan’s weighted index fell 2.26% and Australia’s S&P/ASX 200 closed down 0.81%. China’s CSI 300 and the Shanghai Composite recorded gains of 0.51% and 0.17%, respectively.
Inflation in Japan remained at 2.8% in June, but core inflation rose to 2.6%, below the expected 2.7%. The Japanese central bank is not expected to raise interest rates in July, aiming to support growth. In the tech sector, shares of semiconductor companies in Asia fell, including significant drops for Samsung Electronics and Taiwan Semiconductor Manufacturing Company.
European markets are down, influenced by the recent decision by the European Central Bank (ECB) to keep interest rates steady. All sectors were impacted, especially travel and leisure and mining. The ECB decided not to change interest rates, keeping them at the same level after a reduction in June. Additionally, ECB officials expressed the expectation that inflation would continue to exceed the target set until next year.
On Thursday, U.S. stocks showed a lack of direction before experiencing significant selling pressure throughout the session. As a result, the Nasdaq and S&P 500 extended the sharp losses recorded in the previous session. The Dow Jones fell 533.06 points, or 1.29%, to 40,665.02 points. The S&P 500 slid 43.68 points, or 0.78%, to 5,544.59 points. The Nasdaq dropped 125.70 points, or 0.70%, to 17,871.22 points.
In economic indicators, U.S. initial jobless claims rose to 243,000, above analysts’ expectations of 230,000. The Conference Board reported a 0.2% drop in the leading economic index in June, less than the expected 0.3% decrease.
On the earnings report front for Thursday, before the market opens, American Express (NYSE:AXP), Halliburton (NYSE:HAL), Schlumberger (NYSE:SLB), Travelers (NYSE:TRV), Comerica (NYSE:CMA), Fifth Third Bancorp (NASDAQ:FITB), Regions Financial Corp (NYSE:RF), Autoliv (NYSE:ALV), Badger Meter (NYSE:BMI), Wipro (NYSE:WIT), and more will report.