U.S. Stocks May Extend Yesterday’s Sell-Off In Early Trading

Following the sell-off seen in the previous session, stocks are likely to see further downside in early trading on Friday. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures plunging by 1.8 percent.

Concerns about the outlook for the U.S. economy may continue to weigh on Wall Street following the release of a closely watched Labor Department report showing employment increased by much less than expected in the month of July.

The report said non-farm payroll employment climbed by 114,000 jobs in July after jumping by a downwardly revised 179,000 jobs in June.

Economists had expected employment to rise by 175,000 jobs compared to the surge of 206,000 jobs originally reported for the previous month.

The Labor Department also said the unemployment rate rose to 4.3 percent in July from 4.1 percent in June. Economists had expected the unemployment rate to remain unchanged.

With the unexpected increase, the unemployment rate reached its highest level since hitting 4.5 percent in October 2021.

While weaker than expected economic data has recently been a positive for the markets amid expectations it would convince the Federal Reserve to lower interest rates, traders now seem concerned the Fed has waited too long and could lead the U.S. into a recession.

Negative sentiment has also been generated in reaction to the latest earnings news, with shares of Intel (INTC) plummeting by 24.5 percent in pre-market trading after the semiconductor giant reported weaker than expected second quarter results.

Online retail giant Amazon (AMZN) is also seeing substantial pre-market weakness after reporting weaker than expected second quarter revenues and providing disappointing guidance for the current quarter.

Shares of Apple (AAPL) are also moving to the downside in pre-market trading even though the tech giant reported fiscal third quarter results that beat analyst estimates on both the top and bottom lines.

Shortly after the start of trading, the Commerce Department is scheduled to release its report on new orders for U.S. manufactured goods in the month of June. Factory orders are expected to tumble by 2.9 percent in June after falling by 0.5 percent in May.

After extending Wednesday’s rally early in the session, stocks moved sharply lower over the coursed the trading day on Thursday. The major averages all showed substantial moves to the downside.

The tech-heavy Nasdaq plunged 405.25 points or 2.3 percent to 17,194.15, the S&P 500 tumbled 75.62 points or 1.4 percent to 5,446.68 and the Dow slumped 494.82 points or 1.2 percent to 40,347.97.

In overseas trading, stock markets across the Asia-Pacific region moved notably lower during trading on Friday. Japan’s Nikkei 225 Index plummeted by 5.8 percent, while Hong Kong’s Hang Seng Index dove by 2.1 percent.

The major European markets have also moved to the downside on the day. While the German DAX Index has slumped by 1.4 percent, the French CAC 40 Index is down by 0.6 percent and the U.K.’s FTSE 100 Index is down by 0.1 percent.

In commodities trading, crude oil futures are tumbling $1.26 to $75.04 a barrel after slumping $1.60 to $76.31 a barrel on Thursday. Meanwhile, after inching up $7.80 to $2,480.80 an ounce in the previous session, gold futures are surging $34.80 to $2,515.60 an ounce.

On the currency front, the U.S. dollar is trading at 147.16 yen versus the 149.36 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0860 compared to yesterday’s $1.0791.