Dow Jones Futures Fall as Jobs Report Looms; Amazon dives, biggest profit losers

Dow Jones futures fell sharply Friday morning, along with S&P 500 futures and Nasdaq futures. Apple (AAPL) there was little change in revenue while Amazon.com (AMZN) plummeted when the July jobs report was expected before the opening.

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Nvidia (NVDA) reversed from the 50-day line on a day full of ugly reversals and terrible market breadth. Metaplatforms (META), which rose 11% intraday, settled for a 4.3% gain as many profit gaps disappeared.

Coin base (MINT), Vertex Pharmaceutica (VRTX), MercadoLibre (MELI), Monolithic power (MPWR), DoorDash (DASH), Snapchat parent Snap (SNAP) And Intel (INTC) also reported Thursday evening, with Intel cutting jobs and planning to suspend its dividend. Oil giants ExxonMobil (XOM) And Chevron (CVX) reported early Friday.

MELI stocks, DoorDash and Monolithic Power were big winners overnight, while Coinbase and Exxon showed modest gains. Intel shares and especially Snap were big losers. Chevron and Vertex had changed little before opening.

Nvidia stock is on IBD rankings.

Dow Jones futures today

Dow Jones futures fell 0.9% from fair value, with Apple, Chevron and Intel all holding Dow components. S&P 500 futures lost 1.2%. Nasdaq 100 futures lost 1.9%. Apple stock and Amazon are major members of the S&P 500 and Nasdaq 100.

The yield on ten-year government bonds fell to 3.94%.

The jobs report will certainly have an impact on Dow futures and Treasury yields.

Remember, overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading during the next regular stock market session.

Jobs Report

The Department of Labor will release the July jobs report at 8:30 a.m. ET. Nonfarm payrolls are expected to rise by 180,000, up from 206,000 in June, although private hiring is picking up. The unemployment rate is expected to remain stable at 4.1%, with the average hourly wage increasing by 0.3% compared to June.

After months of looking for an easing in labor markets, investors may want to see some stabilization.

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Expectation breaker in the stock market

After Wednesday’s bullish moves, with the S&P 500 having a de facto follow-up day, the stock market is expected to continue moving higher. But the major indexes saw sharp downward reversals on Thursday, wiping out most or all of Wednesday’s AI and Fed gains. Sales rose after July ISM production data and June construction spending came in well below expectations, raising fears of a recession. The indices closed their worst levels.

The Dow Jones Industrial Average fell 1.3% in stock trading on Thursday, but closed above the 21-day mark. The S&P 500 index fell 1.4%, back below the 21-day mark and just below the 50-day mark. The Nasdaq composite lost 2.3%, back below the 50-day line after trading above the 21-day line shortly after the open. The small-cap Russell 2000 fell 3%, but held the 21-day mark.

US crude oil prices fell 2.05% to $76.31 per barrel. Bitcoin fell 2.85% to $63379.19, widening weekly losses amid an overall risky market.

The yield on ten-year government bonds fell by 13 basis points to 3.98%, breaking the 4% level for the first time since early February. The two-year yield fell by 17 basis points to 4.16%, the lowest level since January.

A day after Fed chief Jerome Powell gave strong signals that rate cuts are coming, investors fear policymakers may act too late.

Taking a step back, the Russell 2000 and many non-tech sectors have given back only some of July’s sharp gains, albeit a large chunk in one day. Meanwhile, the S&P 500 and Nasdaq are near recent lows, with The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) undercutting on Thursday. That suggests concerns about AI spending fatigue and AI valuations persist, despite bullish AI-powered investment plans from Google, Microsoft and Meta Platforms.

One bright spot: The CBOE Volatility Index, or VIX, soared to a three-month high, though the market fear gauge was a far cry from its April 19 intraday high. Excessive anxiety can signal at least a temporary bottom.

ETFs

Among the growth ETFs is the Innovator IBD 50 ETF (FFTY) fell by 2.7%. The iShares Expanded Tech-Software Sector ETF (IGV) gave up 1.6%%. The VanEck Vectors Semiconductor ETF (SMH) fell 6.5%, with Nvidia Stock being the No. 1 member.

Reflecting more speculative story stocks, ARK Innovation ETF (ARKK) fell 5.1% and ARK Genomics ETF (ARKG) retreated 3.5%.

SPDR S&P Metals & Mining ETF (XME) slipped 4.1%. SPDR S&P Home Builders ETF (XHB) lost 3.2%. The Energy Select SPDR ETF (XLE) gave up 2.65% and the Health Care Select Sector SPDR Fund (XLV) increased by 1%.

The Industrial Select Sector SPDR fund (XLI) fell by 1.85%. The Financial Select SPDR ETF (XLF) fell by 1.4%. The SPDR S&P Regional Banking ETF (KRE) fell by 4.5%.

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Apple earnings

Apple’s profits are modestly better than its ratings. AAPL shares fell in overnight action. Shares fell 1.7% to 218.36 on Thursday, back below the 21-day mark and approaching the 21-day mark.

Amazon revenue

Amazon revenue exceeded views, but revenue lagged, although Amazon Web Services revenue slightly exceeded. The cloud computing and e-commerce giant also had lower revenue overall in the third quarter.

AMZN shares fell sharply early Friday. Shares fell 1.6% to 184.07 on Thursday after moving above the 50-day mark at the open.

Nvidia shares are coming back hard

Nvidia opened with decent gains, quickly reaching the 50-day moving average after peaking at 12.8% on Wednesday. But when the market turned around, NVDA shares helped lead the decline, falling 6.7% to 109.21.

Capital expenditure guidance has been strong from tech giants so far. But chip stocks sold off hard during earnings reports on Thursday Arm positions (ARM) dive almost 16%. Lam Research (LRCX) And Qualcomm (QCOM) also collapsed.

NVDA shares fell nearly 4% in pre-market trading. The Justice Department is assessing Nvidia for its dominance of AI chips, including a planned acquisition of startup Run:ai, Politico reported Thursday evening.

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What to do now?

After Wednesday’s bullish gains, Thursday was an expectation-breaker, especially after the open, as the Nasdaq rose above the 21-day line and Nvidia shares edged toward the 50-day line. Small caps, which are always sensitive to big moves, have quickly given up much of their gains since Wednesday afternoon.

Most importantly, recent breakouts failed or faltered.

Investors should respond to these market signals, especially those who were quick to respond to bullish signals.

Now is not the time to make new purchases, while investors may need to exit recent positions.

Friday’s jobs report could calm nerves or stoke fears of a recession, making it a de facto day three response to the Fed meeting. The latest big gains from Apple and others will also move the markets.

Read The Big Picture every day to stay informed about market direction and the most important stocks and sectors.

Follow Ed Carson on Threads at @edcarson1971 and X/Twitter on @IBD_ECarson for stock market updates and more.

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