Tech stocks slide as Netflix plunges on weak guidance and oil tops $80 amid Middle East tensions. Get the latest market updates.
Dow Jones, S&P 500 and Nasdaq futures are currently pointing to a notably lower open on Friday, with stocks likely to extend the pullback seen in the previous session.
Technology stocks are likely to lead the way lower once again, as reflected by the 1.9 percent slump by the tech-heavy Nasdaq 100 futures.
A steep drop by shares of Netflix (NASDAQ:NFLX) is likely to weigh on the tech sector, with the streaming giant plunging by 11.3 percent in pre-market trading.
Netflix is under pressure after reporting second quarter results roughly in line with estimates but providing disappointing third quarter guidance.
Concerns about valuations may also weigh on tech stocks ahead of earnings news from tech giants Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:META) next week.
The downward momentum on Wall Street also comes amid a sharp increase by the price of crude oil, with U.S. crude oil futures surging back above $80 a barrel amid concerns about the escalating conflict in the Middle East.
Tehran launched strikes against several countries across the Gulf and wider region after the U.S. launched a wave of strikes against Iran for the sixth night in a row over control of the Strait of Hormuz.
Stocks moved mostly lower during trading on Thursday, giving back ground following the upward move seen over the two previous sessions. The major averages all moved to the downside, with the Nasdaq showing a significant decline.
The major averages regained some ground going into end of the day but still closed in negative territory. The Nasdaq tumbled 387.28 points or 1.5 percent to 25,881.95, the S&P 500 slid 38.63 points or 0.5 percent to 7,533.77 and the Dow dipped 105.67 points or 0.2 percent to 52,552.97.
The pullback on Wall Street came amid renewed weakness among technology stocks, as reflected by the slump by the tech-heavy Nasdaq.
Computer hardware stocks turned in some of the worst performances, with the NYSE Arca Computer Hardware Index plummeting by 4.6 percent.
Substantial weakness is also visible among semiconductor stocks, as reflected by the 4.3 percent plunge by the Philadelphia Semiconductor Index.
Shares of Taiwan Semiconductor (NYSE:TSM) tumbled by 2.3 percent after the chipmaker reported better than expected second quarter results but forecast an increase in capital spending.
“While the case for boosting capacity is clear at a time when there is a large gap between supply and demand, shareholders will want TSMC to retain some discipline even as it looks to meet orders piling up,” said AJ Bell head of markets Dan Coatsworth.
Outside of the tech sector, gold stocks moved sharply lower along with the price of the precious metal, dragging the NYSE Arca Gold Bugs Index down by 4.4 percent.
Brokerage and steel stocks also saw notable weakness, while transportation stocks showed a significant move to the upside, resulting in a 3.2 percent surge by the Dow Jones Transportation Average.
Commercial real estate, housing and healthcare stocks also saw considerable strength, limiting the downside for the broader markets.
In U.S. economic news, a report released by the Labor Department showed first-time claims for U.S. unemployment benefits unexpectedly dipped to a two-month low last week.
The Labor Department said initial jobless claims fell dipped to 208,000 in the week ended July 11th, a decrease of 8,000 from the previous week’s revised level of 216,000.
Economists had expected jobless claims to rise to 220,000 from the 215,000 originally reported for the previous week.
With the unexpected decrease, jobless claims dropped to their lowest level since hitting 199,000 in the week ended May 2nd.
Meanwhile the Commerce Department released a separate report on Thursday showing a modest increase in U.S. retail sales in the month of June.
The Commerce Department said retail sales crept up by 0.2 percent in June after climbing by an upwardly revised 1.0 percent in May.
Economists had expected retail sales to rise by 0.3 percent compared to the 0.9 percent increase originally reported for the previous month.