U.S. stock index futures are signaling a firmer open on Friday, suggesting equities may recover some lost ground after several sessions of sharp declines.
Investors appear poised to hunt for bargains following the recent technology-led pullback, which pushed the Nasdaq to its lowest closing level in more than two months. That said, trading volumes could remain light after the Labor Department delayed its closely watched monthly employment report until next Wednesday.
Market upside may also be capped by ongoing unease over heavy artificial intelligence spending, compounded by a sharp premarket drop in Amazon (NASDAQ:AMZN). The online retail giant is down 8.5% ahead of the open after posting slightly weaker-than-expected fourth-quarter earnings and unveiling 2026 capital expenditure plans that came in well above analyst forecasts.
“All the hyperscalers are competing to win the AI race, for which the prize could be significant,” said Russ Mould, investment director at AJ Bell. “However, investors are being asked to countenance enormous amounts of cash going out the door in service of this goal.”
He added, “With the exact direction and trajectory of artificial intelligence still uncertain there is understandable concern that this money could be wasted.”
Thursday’s session saw a broad selloff across U.S. equities, extending Wednesday’s mixed performance. Technology shares bore the brunt of the pressure, with the Nasdaq sliding to its weakest close in over two months.
While stocks recovered somewhat from intraday lows, the major indices still ended decisively lower. The Nasdaq sank 363.99 points, or 1.6%, to 22,540.59. The S&P 500 fell 84.32 points, or 1.2%, to 6,798.40, while the Dow Jones Industrial Average dropped 592.58 points, or 1.2%, to 48,908.72.
Continued weakness in technology stocks weighed heavily on sentiment, amplified by a sharp decline in Qualcomm (NASDAQ:QCOM). The chipmaker tumbled 8.5% after reporting fiscal first-quarter earnings that topped expectations but issuing lackluster guidance for the current quarter.
Meanwhile, Google parent Alphabet (NASDAQ:GOOG) finished well above its session lows but still closed down 0.5%. The company beat fourth-quarter estimates but rattled investors by flagging a significant increase in capital spending for 2026.
Technology shares have retreated sharply in recent days as investors reassess valuations and the longer-term payoff from AI-related investments.
On the economic front, fresh data from the Labor Department showed a much larger-than-expected rise in initial claims for unemployment benefits in the week ended January 31. First-time claims jumped to 231,000, up 22,000 from the prior week’s unrevised level of 209,000. Economists had been looking for a more modest increase to around 212,000. The latest reading marked the highest level since early December.
A separate Labor Department report also showed U.S. job openings unexpectedly fell in December to their lowest level in more than five years.
Sector-wise, gold stocks were hit hard alongside a slide in bullion prices, with the NYSE Arca Gold Bugs Index plunging 6.3%. Software and computer hardware names also saw heavy selling, dragging the Dow Jones U.S. Software Index down 5.1% and the NYSE Arca Computer Hardware Index lower by 4.2%.
Oil service stocks weakened as crude prices dropped sharply, reflected in a 3.1% fall in the Philadelphia Oil Service Index. Financials, retailers and pharmaceutical stocks also posted notable declines, leaving most major sectors in negative territory by the close.