Upbeat Amazon, Intel Earnings May Spark Rebound On Wall Street

The major U.S. index futures are currently pointing to a higher open on Friday, with stocks likely to regain ground following the sell-off seen in the previous session.

Early buying interest may be generated in reaction to upbeat earnings news from big-name companies like Amazon (AMZN) and Intel (INTC).

Shares of Amazon are surging by 6.9 percent in pre-market trading after the online retail giant reported third quarter results that exceeded analyst estimates on both the top and bottom lines.

Semiconductor giant Intel is also soaring by 7.4 percent in pre-market trading after reporting better than expected third quarter results and providing strong guidance.

Shares of Exxon Mobil (XOM) may also move to the upside after the oil giant reported third quarter earnings that beat expectations.

On the other hand, shares of Apple (AAPL) are seeing some pre-market weakness even though the tech giant reported better than expected fiscal fourth quarter results.

The futures remained firmly positive after the Labor Department released a closely watched report showing much weaker than expected job growth in the month of October.

The Labor Department said non-farm payroll employment crept up by 12,000 jobs in October after jumping by a downwardly revised 223,000 jobs in September.

Economists had expected employment to climb by 113,000 jobs compared to the surge of 254,000 jobs originally reported for the previous month.

Meanwhile, the report said the unemployment rate came in at 4.1 percent in October, unchanged from September and in line with economist estimates.

While the data may raise some concerns about the strength of the economy, the report may also lead to renewed optimism about the outlook for interest rates.

After moving sharply lower early in the session, stocks continued to see considerable weakness throughout the trading day on Thursday. The Nasdaq saw a particularly steep drop on the day amid a sell-off by technology stocks.

The major averages saw further downside going into the close, ending the session near their worst levels of the day. The Nasdaq plunged 512.78 points or 2.8 percent to 18,095.15, the S&P 500 tumbled 108.22 points or 1.9 percent to 5,705.45 and the Dow slumped 378.08 points or 0.9 percent to 41,763.46.

The sell-off on Wall Street came amid a negative reaction to earnings news from tech giants Microsoft (MSFT) and Meta Platforms (META).

Shares of Microsoft plunged by 6.0 percent after the company reported better than expected fiscal first quarter results but provided disappointing revenue guidance for the current quarter.

Facebook parent Meta also dove by 4.1 percent after reporting third quarter earnings that beat estimates but weaker than expected user growth. Meta also forecast an increase in capital spending due to AI investments.

Traders were also reacting to closely watched consumer price inflation data that largely came in line with economist estimates.

The Commerce Department said its personal consumption expenditures (PCE) price index rose by 0.2 percent in September and the annual rate of growth slowed to 2.1 percent, which both matched expectations.

However, the annual rate of growth by the core PCE price index, which excludes food and energy prices, was unchanged from the previous month at 2.7 percent. Economists had expected the pace of growth to slow to 2.6 percent.

The slightly faster than expected core price growth may have added to recent concerns the Federal Reserve will lower interest rates more slowly than hoped.

“The year-over-year core PCE print indicated a 2.7% increase suggesting that the Fed is still on a bumpy course in this last mile to quell inflation and declare victory,” said Quincy Krosby, Chief Global Strategist for LPL Financial.

She added, “Although a 25-basis point move lower at the next Fed meeting is expected the Fed will need to acknowledge that with still resilient consumer spending, higher wages from a series of successful strikes, and a solid labor market, they will need to adopt the ‘gradual’ approach towards lowering rates until there’s a comfort level within the FOMC that inflation isn’t poised to continue edging higher.”

A report from the Labor Department showing initial jobless claims unexpectedly fell to a five-month low last week may also have added to the worries about slower rate cuts.

With Microsoft helping lead the way lower, software stocks saw substantial weakness on the day, dragging the Dow Jones U.S. Software Index down by 4.3 percent.

Significant weakness was also visible among semiconductor stocks, as reflected by the 4.0 percent nosedive by the Philadelphia Semiconductor Index. The index tumbled to its lowest closing level in over a month.

Gold stocks also moved sharply lower along with the price of the precious metal, resulting in a 3.2 percent slump by the NYSE Arca Gold Bugs Index.

Computer hardware, commercial real estate and brokerage stocks also saw considerable weakness, while utilities and energy stocks bucked the downtrend.

Commodity, Currency Markets

Crude oil futures are jumping $1.67 to $70.93 a barrel after climbing $0.65 to $69.26 a barrel on Thursday. Meanwhile, after plunging $51.50 to $2,749.30 an ounce in the previous session, gold futures are rising $16.90 to $2,766.20 an ounce.

On the currency front, the U.S. dollar is trading at 151.97 yen versus the 152.03 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0898 compared to yesterday’s $1.0884.

Asia

Asian stocks ended mostly lower on Friday, even as Hong Kong markets edged up after the release of positive readings on Chinese manufacturing activity and home sales.

A cautious undertone prevailed elsewhere across Asia due to mixed earnings from U.S. technology companies, persisting Middle East tensions and uncertainty ahead of next week’s U.S. presidential election.

Apple reported weaker-than-anticipated sales in China, while Amazon and Intel issued strong guidance.

Investor focus also shifted to U.S. jobs data due later in the day that could offer additional clues on the Fed’s rate trajectory.

The dollar steadied against major peers, while gold recovered some ground and headed for a small weekly gain after falling from record highs on Thursday.

Oil extended gains from the previous session after Israeli intelligence suggested Iran is preparing to attack Israel from Iraqi territory in the coming days.

China’s Shanghai Composite Index fluctuated before ending 0.2 percent lower at 3,272.01 ahead of China’s top legislative body meeting from November 4-8.

Hong Kong’s Hang Seng Index jumped 0.9 percent to 20,506.43 after a private survey showed Chinese factory activity swung back into expansion among smaller manufacturers in October.

In addition, sales of new homes at China’s biggest homebuilders grew from a year earlier for the first time this year last month after authorities unleashed their strongest package of measures.

Japanese markets tumbled after the yen jumped nearly 1 percent against the greenback Thursday on comments from Bank of Japan Governor Kazuo Ueda that currency markets have had a major impact on the economy, leaving the door open for near-term rate hikes.

Investors also reacted to survey data showing that Japanese factory activity shrank at the fastest pace in three months in October.

The Nikkei 225 Index dove 2.6 percent to 38,053.67, while the broader Topix Index settled 1.9 percent lower at 2,644.26.

Chip testing device maker Lasertec plunged 16.4 percent as its earnings report fell short of market expectations. Advantest lost 4.4 percent, Tokyo Electron gave up 3.9 percent and technology investors SoftBank Group plummeted 5.6 percent.

Seoul stocks fell for a third day running due to losses in the technology sector. The Kospi dropped 0.5 percent to 2,542.36. Samsung Electronics, the world’s largest memory chipmaker, fell 1.5 percent, and SK Hynix declined 2.2 percent.

Australian markets fell for a third straight session following worrying forecasts from Microsoft and Meta Platforms.

The benchmark S&P/ASX 200 Index dropped half a percent to 8,118.80, reaching its lowest level in seven weeks. The broader All Ordinaries Index also fell half a percent to close at 8,379.70.

Financials were among the worst hit after Macquarie Group’s profit fell short of analyst estimates. Shares of the financial services conglomerate tumbled 3.6 percent.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index ended down 0.6 percent at 12,559.28.

Europe

European stocks have moved higher on Friday as traders digest the closely watched U.S. jobs report and look ahead to next week’s U.S. presidential election.

The U.K.’s FTSE 100 Index is up by 0.8 percent, the French CAC 40 Index is up by 0.7 percent and the German DAX Index is up by 0.6 percent.

Eurozone bonds remained mostly unchanged as signs of accelerating Eurozone inflation has led to speculation the European Central Bank will likely adopt a more cautious approach to rate cuts.

The British pound was steady after Chancellor of the Exchequer Rachel Reeves said her budget would put the U.K.’s public finances on a stable and solid trajectory.

In addition, data showed earlier today that house price inflation in the U.K. eased for the first time in six months in October.

Technology stocks such as SAP and ASML Holding are seeing modest gains after Amazon and Intel issued strong guidance.

Shares of Solid State, a specialist value-added component supplier, have jumped in London after the company announced the acquisition of Q-Par Antennas USA LLC for a maximum consideration of up to $2.0 million.

Consumer goods conglomerate Reckitt Benckiser has also soared after it was cleared of liability in a trial regarding its baby formula.

China-related luxury stocks such as LVMH and Herms are seeing modest gains as a private survey showed activity in China’s manufacturing sector rebounded in October after a dip into contraction the previous month.

Siemens has risen on reports that the German conglomerate is eyeing more acquisitions after its $10.6 billion purchase of U.S. industrial software company Altair.

U.S. Economic News

With increases in healthcare and government jobs partly offset by decreases in temporary and manufacturing jobs, the Labor Department released a report on Friday showing employment in the U.S. edged only slightly higher in the month of October.

The Labor Department said non-farm payroll employment crept up by 12,000 jobs in October after jumping by a downwardly revised 223,000 jobs in September.

Economists had expected employment to climb by 113,000 jobs compared to the surge of 254,000 jobs originally reported for the previous month.

Meanwhile, the report said the unemployment rate came in at 4.1 percent in October, unchanged from September and in line with economist estimates.

At 9:45 am ET, Dallas Federal Reserve President Lorie Logan is scheduled to deliver a welcome address before the Women in Central Banking Workshop.

The Institute for Supply Management is due to release its report on manufacturing activity in the month of October at 10 am ET. The ISM’s manufacturing PMI is expected to inch up to 47.6 in October from 47.2 in September, but a reading below 50 would still indicate contraction.

Also at 10 am ET, the Commerce Department is scheduled to release its report on construction spending in the month of September. Construction spending is expected to come in unchanged in September after edging down by 0.1 percent in August.