The major U.S. index futures are currently pointing to a higher open on Friday, with stocks likely to regain ground following the sell-off seen in the previous session.
Early buying interest may be generated in reaction to upbeat earnings news from big-name companies like Amazon (NASDAQ:AMZN) and Intel (NASDAQ:INTC).
Shares of Amazon are surging by 6.9 percent in pre-market trading after the online retail giant reported third quarter results that exceeded analyst estimates on both the top and bottom lines.
Semiconductor giant Intel is also soaring by 7.4 percent in pre-market trading after reporting better than expected third quarter results and providing strong guidance.
Shares of Exxon Mobil (NYSE:XOM) may also move to the upside after the oil giant reported third quarter earnings that beat expectations.
On the other hand, shares of Apple (NASDAQ:AAPL) are seeing some pre-market weakness even though the tech giant reported better than expected fiscal fourth quarter results.
The futures remained firmly positive after the Labor Department released a closely watched report showing much weaker than expected job growth in the month of October.
The Labor Department said non-farm payroll employment crept up by 12,000 jobs in October after jumping by a downwardly revised 223,000 jobs in September.
Economists had expected employment to climb by 113,000 jobs compared to the surge of 254,000 jobs originally reported for the previous month.
Meanwhile, the report said the unemployment rate came in at 4.1 percent in October, unchanged from September and in line with economist estimates.
While the data may raise some concerns about the strength of the economy, the report may also lead to renewed optimism about the outlook for interest rates.
After moving sharply lower early in the session, stocks continued to see considerable weakness throughout the trading day on Thursday. The Nasdaq saw a particularly steep drop on the day amid a sell-off by technology stocks.
The major averages saw further downside going into the close, ending the session near their worst levels of the day. The Nasdaq plunged 512.78 points or 2.8 percent to 18,095.15, the S&P 500 tumbled 108.22 points or 1.9 percent to 5,705.45 and the Dow slumped 378.08 points or 0.9 percent to 41,763.46.
The sell-off on Wall Street came amid a negative reaction to earnings news from tech giants Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:META).
Shares of Microsoft plunged by 6.0 percent after the company reported better than expected fiscal first quarter results but provided disappointing revenue guidance for the current quarter.
Facebook parent Meta also dove by 4.1 percent after reporting third quarter earnings that beat estimates but weaker than expected user growth. Meta also forecast an increase in capital spending due to AI investments.
Traders were also reacting to closely watched consumer price inflation data that largely came in line with economist estimates.
The Commerce Department said its personal consumption expenditures (PCE) price index rose by 0.2 percent in September and the annual rate of growth slowed to 2.1 percent, which both matched expectations.
However, the annual rate of growth by the core PCE price index, which excludes food and energy prices, was unchanged from the previous month at 2.7 percent. Economists had expected the pace of growth to slow to 2.6 percent.
The slightly faster than expected core price growth may have added to recent concerns the Federal Reserve will lower interest rates more slowly than hoped.
“The year-over-year core PCE print indicated a 2.7% increase suggesting that the Fed is still on a bumpy course in this last mile to quell inflation and declare victory,” said Quincy Krosby, Chief Global Strategist for LPL Financial.
She added, “Although a 25-basis point move lower at the next Fed meeting is expected the Fed will need to acknowledge that with still resilient consumer spending, higher wages from a series of successful strikes, and a solid labor market, they will need to adopt the ‘gradual’ approach towards lowering rates until there’s a comfort level within the FOMC that inflation isn’t poised to continue edging higher.”
A report from the Labor Department showing initial jobless claims unexpectedly fell to a five-month low last week may also have added to the worries about slower rate cuts.
With Microsoft helping lead the way lower, software stocks saw substantial weakness on the day, dragging the Dow Jones U.S. Software Index down by 4.3 percent.
Significant weakness was also visible among semiconductor stocks, as reflected by the 4.0 percent nosedive by the Philadelphia Semiconductor Index. The index tumbled to its lowest closing level in over a month.
Gold stocks also moved sharply lower along with the price of the precious metal, resulting in a 3.2 percent slump by the NYSE Arca Gold Bugs Index.
Computer hardware, commercial real estate and brokerage stocks also saw considerable weakness, while utilities and energy stocks bucked the downtrend.