U.S. stock futures slipped on Friday as investors processed a wave of corporate earnings ahead of a crucial inflation report. This comes at the end of a month that has been notably strong for the stock market, although Wall Street appears poised for a losing week.
Futures for the Dow Jones Industrial Average fell by 37 points, or 0.10%, while S&P 500 and Nasdaq 100 futures declined by 0.20% and 0.31%, respectively.
The market reacted to varied earnings reports from several major companies. Dell Technologies plummeted 16% despite surpassing first-quarter expectations. In contrast, cloud security company Zscaler surged 14%, while developer data platform MongoDB dropped 23%. Apparel retailer Gap saw a significant rise of 21%, whereas department store chain Nordstrom fell by more than 6%.
This decline follows a losing session for the main benchmarks. The Dow Jones Industrial Average dropped over 300 points, or 0.9%, due to Salesforce missing revenue expectations. The S&P 500 decreased by 0.6%, and the Nasdaq Composite fell by 1.1%.
These fluctuations occurred during a holiday-shortened trading week. Both the S&P 500 and Nasdaq Composite are on track to end five-week winning streaks, while the Dow is heading for its second consecutive week of losses, influenced by rising Treasury yields affecting investor sentiment.
Investors are wary that the recent market rally might be losing steam. Concerns are mounting that the impressive performance of a few large-cap tech stocks, particularly Nvidia, is overshadowing broader market weaknesses. While the S&P 500 has risen approximately 10% this year, the equal-weighted index has only gained about 3%.
“When we see option pricing betting that the momentum is going to continue or actually exceed history, that becomes a problem for us,” said Jeff deGraff, head of technical research at Renaissance Macro Research, on CNBC’s “Closing Bell.” He pointed to recent spikes in semiconductor stocks like Qualcomm and Nvidia.
“They might consolidate over the summer, but this isn’t the place to be putting in fresh money,” deGraff added. “So, I think the expectations are pretty filled up here, and we just want to be careful.”
The April personal consumption expenditure (PCE) data is scheduled for release on Friday morning. Economists surveyed by Dow Jones anticipate a 2.7% year-over-year increase in core PCE, slightly down from the previous 2.8% gain.
Despite the recent volatility, stocks are on track to close out a robust month, with each major benchmark poised to mark a sixth positive month in the last seven. The Dow has risen 0.8% this month, the S&P 500 is up 4%, and the tech-heavy Nasdaq Composite, which has gained about 7%, is on pace for its best month since November 2023, when it surged 10.7%.
