US Markets Brace for Rough Weekly Finish
US stock futures moved lower on Friday, signaling a difficult end to the trading week as concerns about economic growth and overvalued technology companies continued to weigh on investor confidence. The three major indexes - Dow Jones Industrial Average, S&P 500, and Nasdaq - are all positioned for significant weekly declines that could mark their poorest performance in weeks.
At 7:30 am Eastern Time, Dow futures had dropped 120 points, representing a 0.26% decrease. S&P 500 futures followed with a decline of 19 points or 0.27%, while Nasdaq 100 futures fell more sharply by 90.5 points, equivalent to 0.36%.
Technology Sector Leads Market Decline
The Nasdaq Composite, which suffered a nearly 2% drop on Tuesday, is now heading toward its worst weekly performance since March. Both the S&P 500 and Dow Jones Industrial Average are preparing for their most substantial weekly losses in four weeks, indicating broad-based market pressure.
This year's remarkable market rally, largely fueled by artificial intelligence enthusiasm, had previously pushed markets to record highs. However, increasing skepticism about AI's actual profitability potential and concerns about excessive valuations have cooled investor sentiment in recent trading sessions.
The Nasdaq's current trajectory suggests it could post its most challenging week since March, highlighting how quickly market conditions can shift even during strong rallies.
Individual Stock Movements and Economic Data Gaps
Several notable stocks showed significant movement in premarket trading. Tesla shares remained stable after shareholders approved CEO Elon Musk's record-breaking compensation package. Intel gained 0.8% following Musk's hints about potential discussions to produce chips with the company.
Sandisk shares climbed 4% after reporting strong first-quarter earnings, which also lifted other data storage stocks. However, payments company Block experienced a dramatic 15% plunge after missing profit forecasts amid slowing growth and increasing competition.
According to LSEG data, corporate earnings have shown remarkable strength. Of the 424 S&P 500 companies that have reported third-quarter results so far, 83% have exceeded Wall Street expectations. This represents the best performance since mid-2021 and significantly outperforms the typical pattern where about two-thirds of companies surpass estimates.
Meanwhile, the ongoing US government shutdown has created significant gaps in official economic data, forcing traders and Federal Reserve officials to rely on private indicators. This week, these alternative data sources presented a mixed picture regarding employment trends and layoff activity.
The combination of stretched valuations in the technology sector, uncertainty about the economic outlook, and data limitations due to the government shutdown has created a challenging environment for investors seeking clear direction in the markets.
