US stock futures tumbled across the board on Friday, as chipmaker Intel’s (INTC) bombshell earnings added to the economic growth jitters putting pressure on the market ahead of the July jobs report.
Dow Jones Industrial Average futures (YM=F) tanked roughly 1%, or almost 400 points, as a flight from stocks accelerated. S&P 500 futures (ES=F) sank 1.1%, while Nasdaq 100 futures (NQ=F) dived 1.8% in the wake of dismal results from Intel and Amazon (AMZN).
Stocks kicked off August with a sell-off after a clutch of data on Thursday showed cracks emerging in the US economy, wiping out gains spurred by expectations for a September interest-rate cut.
Wall Street is wondering whether the economic slowdown shown in recent data means the Federal Reserve has kept interest rates at historic highs for too long, risking a recession.
Traders are now pricing in three 25-basis-point cuts this year — in September, November and December — and bets are rising on one of them being 50 basis points. Bond yields faltered, with the benchmark 10-year Treasury (^TNX) yield holding below the 4% level last crossed in February.
That has put the monthly jobs report under intensified focus, watched for more signs of labor market cooling that would spur recession fears and rate-cut expectations alike. The release, due at 8:30 a.m. ET, is expected to show nonfarm payrolls rose by 175,000 in July while the unemployment rate remained steady at 4.1%.
More pressure came as Intel spooked investors already questioning the payoff of AI investments for Big Tech. The chipmaker said it will slash jobs and suspend dividends after its sales forecast fell short and it missed on earnings. Intel shares sank over 20% in pre-market trading, dragging on other chip stocks.
Meanwhile, Amazon stock slid over 8% on the heels of sales guidance that undershot Wall Street estimates, and Apple (AAPL) shares were little changed after it reported a slide in iPhone sales, though it beat on earnings.
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