Nasdaq futures fall after weak Amazon guidance adds pressure to tech rout

Nasdaq 100 futures were lower Friday after disappointing Amazon earnings added to the already pressured index.

Futures tied to the Nasdaq slid 1%. Dow Jones Industrial Average futures were lower by 41 points, or 0.1%, and S&P 500 futures lost 0.6%.

Amazon led the declines in premarket trading, plunging by 13% after the company posted weaker-than-expected quarterly revenue and issued disappointing fourth-quarter sales guidance.

Apple shares were initially lower too in extended trading after the company reported weaker-than-anticipated iPhone revenue, but they have since reversed higher and were last up about 0.7%.The company still beat Wall Street estimates for quarterly earnings and revenue.

Tech names were a dark cloud over the market once again on Thursday. The Nasdaq Composite lost 1.6%, due to a rout in Meta and other tech stocks following the Facebook-parent’s disappointing results. Meanwhile, the Dow rose 194.17 points, or 0.6%, for its fifth straight day of wins, helped by string earnings from members and GDP data that hinted that inflation may be waning.

The stock market has fractured this week as investors dump technology shares following weak results and outlooks from Microsoft, Alphabet and Meta and rotate into economically-sensitive stocks that will benefit if the U.S. economy can skirt a recession.

“The weight of tech in the S&P 500 painted a more negative picture of the market yesterday than was the actual reality, as most sectors of the market posted decent rallies or fell only modestly,” said Tom Essaye, president of Stevens Report Research.

“Looking forward, we remain in the heart of earnings season and results will continue to dominate sector trade through the end of next week,” he said. “Outside of tech, it’s fair to say this earnings season is, so far, not as bad as feared.”

The Dow and S&P are on pace to end the week higher by about 3% and 1.5%, respectively. The Nasdaq Composite set to finish lower by about 1%.

Friday brings a quieter day for earnings. Oil companies Chevron and Exxon both outperformed expectations when reporting before the bell, sending shares up 2.5% and 2.4%, respectively.

In economic data, traders are looking forward to the Personal Consumption Expenditures Price Index, the Federal Reserve’s preferred inflation gauge, as well as consumer sentiment and pending home sales.