Dow Jones futures turn lower Friday morning, while S&P 500 futures and Nasdaq futures rose. Amazon.com (AMZN) headlined earnings Thursday night, with Exxon Mobil and Chevron reporting early Friday.
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The stock market correction intensified Thursday, with the Nasdaq tumbling below its 200-day moving average. The indexes did come off intraday lows, but the bounce didn’t last long.
Tech titans led the decline. Meta Platforms (META) signaled concerns about advertising. That also hit Google parent Alphabet (GOOGL), Wednesday’s big loser, as well as AMZN stock heading into results. Meta’s lower-than-expected capital spending plans hit Nvidia (NVDA), as well other big techs such as Arista Networks (ANET). Apple (AAPL) broke below its 200-day line, with Tesla (TSLA) closing further below that key level. Even Microsoft (MSFT), a notable earnings winner Wednesday, gave up all those gains Thursday.
Amazon Earnings
Amazon stock jumped 6% in extended trade. The e-commerce and cloud giant reported better-than-expected earnings and sales, though its Q4 revenue guidance was a little light. Amazon Web Services revenue grew 12%, just missing Q3 views. But the tech giant sees generative AI as a boon for AWS. Earlier this week Microsoft had reported strong Azure cloud-computing revenue while Google Cloud disappointed. In Thursday’s session Amazon stock fell to two-month lows.
Chipotle Mexican Grill (CMG), Ford Motor (F), Intel (INTC) Dexcom (DXCM), Deckers Outdoor (DECK) and Enphase Energy (ENPH) also reported Thursday night. Intel stock, Chipotle, Dexcom and Deckers were solid-to-strong earnings winners overnight. Ford fell modestly while ENPH stock plunged.
Early Friday, Chevron (CVX) and Exxon Mobil (XOM) missed EPS views. CVX stock fell modestly. Exxon edged higher, helped by a modest dividend boost. Shares of the oil majors have tumbled recently on big takeover deals and with crude oil and gasoline futures coming off highs. Energy prices were up solidly Friday.
Meta stock and Nvidia are on IBD Leaderboard, though Meta’s position was trimmed. MSFT stock is on IBD Long-Term Leaders. Microsoft, Google and Nvidia stock are on the IBD 50. Microsoft and Google stock are on the IBD Big Cap 20.
Dow Jones Futures Today
Dow Jones futures fell 0.2% vs. fair value, fading from a slim rise overnight. INTC stock offered a lift while Chevron was a fractional drag. S&P 500 futures rose 0.2%. Nasdaq 100 futures climbed 0.7%. Amazon and Intel stock buoyed S&P 500 and Nasdaq futures, with Microsoft, Google, Meta and Nvidia up slightly.
The 10-year Treasury bond yield climbed a few basis points 4.87%.
Crude oil futures rose more than 1%.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
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Stock Market Correction
The stock market correction saw fierce selling once again, led by techs, even as Treasury yields extended losses. A midafternoon bounce off lows for stocks largely wilted by the close.
The Dow Jones Industrial Average fell 0.8% in Thursday’s stock market trading. The S&P 500 index skidded 1.2%. The Nasdaq composite sold off 1.8%.
The Nasdaq composite plunged below its 200-day line, joining the other major indexes. The Dow Jones sank to its worst level in nearly five months, ending its anemic rally attempt.
Market breadth wasn’t that bad Thursday, with winners almost equaling losers. But the overall trend has been bleak.
The small-cap Russell 2000 climbed 0.3%. Intraday, it jumped more than 1%, then slipped to a fresh 52-week low before the afternoon bounce. It’s almost at its worst levels since late 2020.
The Invesco S&P 500 Equal Weight ETF (RSP) dipped 0.2%. While easily outperforming the S&P 500, RSP is trading at its lowest levels in almost a year.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) fell 1.1%, to a five-month low. That was better than the Nasdaq 100, which slumped 1.9% but is still above its 200-day.
Investors may have been holding onto stocks, especially tech giants, despite the correction, hoping that earnings season would revive the market. Instead, earnings have been a negative catalyst so far.
At Thursday’s lows, the market arguably was “due” for a bounce on a variety of measures. But the bounce only lasted about 90 minutes.
The 10-year Treasury yield tumbled 11 basis points on Thursday to 4.84%, reversing from an early high of 4.98% as tame inflation data offset strong Q3 GDP growth. Still, the strong uptrend in Treasury bond yields remains intact.
U.S. crude oil prices slumped 2.55% to $83.21 a barrel.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) shed 0.9%. Microsoft stock is a huge IGV component. The VanEck Vectors Semiconductor ETF (SMH) gave up 0.9%. Nvidia stock is the No. 1 holding in SMH.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) fell 1.3% and ARK Genomics ETF (ARKG) nudged 0.1% higher. Tesla stock is a major Holding across Ark Invest’s ETFs, but no longer No. 1.
SPDR S&P Metals & Mining ETF (XME) edged up 0.1%. SPDR S&P Homebuilders ETF (XHB) stepped up 0.9%. The Energy Select SPDR ETF (XLE) declined 0.8%, with CVX stock and Exxon both massive holdings.
The Health Care Select Sector SPDR Fund (XLV) gave up 1% and the Industrial Select Sector SPDR Fund (XLI) slipped 0.4%.
The Financial Select SPDR ETF (XLF) dipped 0.2%. The SPDR S&P Regional Banking ETF (KRE) popped 3% after hitting a five-month low Wednesday.
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Tech Titans Slump
Meta stock fell 3.7% on Thursday, off 6.6% for the week.
GOOGL stock has plunged 9.8% this week, down 2.65% on Thursday.
Apple stock has lost 3.7% this week, breaking below its 200-day line and recent lows Thursday.
Nvidia stock is only down 2.6% for the week, but has fallen solidly for two sessions to hit a five-month low Thursday.
Amazon stock sank 4.3% through Thursday, nearing its 200-day line.
TSLA stock has retreated 2.9% this week, but after diving nearly 16% last week. Shares are getting a little distance below the 200-day, but are above Monday’s intraday low.
MSFT stock is still up 0.4% for the week, despite Thursday’s 3.75% slide. It’s now the only Magnificent Seven stock above its 50-day line.
Amazon is due toerase its weekly losses and then some at Friday’s open, with all the other Magnificent Seven set to rise slightly.
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What To Do Now
This is a market correction. Until that changes, investors should be patient.
At some point, the market will have a positive session, perhaps a big rebound. But the best days in history are in corrections or bear markets. Wait for clear signs of market strength.
A growing number of leading stocks are now heavily damaged, including Meta, Google, Tesla and many others. Those could take several days, weeks or even months to repair.
Investors need to overhaul their watchlists in the coming days, looking for stocks still holding key levels and with strong relative strength lines.
Follow the market and focus on being ready for the next real uptrend, rather than fighting today’s long odds.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on X/Twitter at @IBD_ECarson, Threads at @edcarson1971 and Bluesky at @edcarson.bsky.social for stock market updates and more.
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