Tech Underperforms Nasdaq, Stock Futures Plunge

U.S. stock futures fell ahead of Friday’s open, with megacap tech stocks underperforming in premarket trading, signaling a bearish weekend on Wall Street.

S&P 500 futures (^GSPC) are down 0.7%, while Dow Jones Industrial Average (^DJI) futures fell 0.4%. Contracts on the tech-heavy Nasdaq Composite (^IXIC) fell 1.2%.

The yield on the benchmark 10-year US Treasury bond rose to 3.7% on Friday morning. The dollar index rose 0.2% to $103.40. Crude oil jumped on news that Russia would cut production, with US benchmark WTI futures rising more than 2% in early trading.

Shares finished the day lower on Thursday, reversing earlier gains from the day’s trading session as traders scanned more corporate earnings and economic data.

The S&P 500 has seen choppy price action over the past week, losing more than 1% after the Federal Reserve raised its short-term interest rate by a quarter of a percentage point. Data from Bespoke Investments shows most sectors are in the downturn, excluding energy, which rallied 1%, while communications services were the worst performer.

Meanwhile, tight liquidity in the market has prompted a move in bonds, as the bond market is repricing higher terminal rates and fewer rate cuts in the second half of 2023 after last week’s hot jobs report, Fedspeak and the “Car price comeback,” Andrew Tyler, JP Morgan’s US Market Intelligence team, wrote in a note to clients.

On the macro front, investors will await the results of the University of Michigan consumer confidence survey on Friday morning, which could help further fuel the cooling inflation narrative.

In specific stock moves, shares of PayPal (PYPL) rose after the platform company released its quarterly results after the bell on Thursday. PayPal’s total payment volume fell 2% short of analyst expectations. Net revenues increased 6.7% year over year. PayPal’s adjusted earnings per share of $1.24 beat analyst expectations by 3%, which helped drive stronger-than-expected guidance.

From a business perspective, President and Chief Executive Officer Dan Schulman announced his retirement from the company at the end of the year. Schulman will continue to serve on the board of directors as the company searches for a successor.

Meanwhile, shares of Lyft (LYFT) tumbled 30% after the ride-share firm reported first-quarter earnings of $975 million, which fell short of consensus expectations of $1.09 billion. . The adjusted net loss of $270.8 million was higher than the loss of $90.2 million for the same period a year ago.

Cloudflare (NET) stock soared 7% after the company reported earnings beat analyst expectations.

Shares of Expedia (EXPE) fell before the opening bell after the travel company reported quarterly revenue of $2.62 billion, below expectations by $2.71 billion. Adjusted earnings per share of $1.26 missed the analyst consensus by $1.77.

Shares of Coinbase (COIN) plunged Friday morning after rival Kraken faced $30 million in regulatory penalties as part of a settlement with the Securities and Exchange Commission. The crackdown prompted Coinbase CEO Brian Armstrong to tweet concern over “rumors” that the SEC “would like to get rid of US crypto staking”

Bitcoin stands at around $21,844 on Friday morning, suggesting that the digital asset “appears to have entered a correction phase,” said Craig Erlam, senior market analyst at Oanda.

Dani Romero is a Yahoo Finance reporter. Follow her on Twitter @daniromerotv

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