The U.S. stock market slipped in early trading Friday as shares of major technology companies suffered following disappointing earnings reports.
The tech-heavy Nasdaq Composite dropped 0.6%. The S&P 500 shed 0.3% while the Dow Jones Industrial Average rose 55 points.
Amazon shares dropped 4% in early trading after the e-commerce giant badly missed earnings and revenue expectations for the third quarter. The company also issued disappointing guidance for the critical holiday period.
Apple stock fell 3.5% after the tech giant’s quarterly revenue fell short of expectations amid larger-than-expected supply constraints on iPhones, iPads and Macs. It was the first time Apple’s revenues have missed Wall Street estimates since May 2017.
Investors were betting on good tech results in the prior session. The S&P 500 and the Nasdaq Composite both closed Thursday’s session at record highs. Both Apple and Amazon gained on Thursday into the results.
Despite the recent disappointing results from Big Tech, the stock market has been raking in records amid solid earnings. About half of the S&P 500 have reported quarterly results and more than 80% of them beat earnings estimates from Wall Street analysts. S&P 500 companies are expected to grow profit by 38.6% year over year.
Shares of Exxon Mobil and Chevron rose in early trading after the energy giants topped earnings expectations. Starbucks was under pressure after revenue from China missed expectations.
Caterpillar and Microsoft were two of the best performers in the Dow, helping the 30-stock average outperform.
All three major averages are on track to post a winning week, their fourth positive week in a row. Month to date, the S&P 500 is up 6.7%, on pace for its best monthly performance since November 2020. The blue-chip Dow has gained 5.6% in October, while the Nasdaq has rallied 6.9%.
On Thursday, investors largely shrugged off a weak GDP report. The U.S. economy grew at a 2% annualized pace in the third quarter, its slowest increase since the end of the 2020 recession and missing expectations of 2.8% growth, the report showed.
“GDP told us what we already knew, the economy slowed down considerably in the third quarter,” said Ryan Detrick, chief market strategist at LPL Financial. “The good news is we see the next few quarters more than making up for the slowdown, as COVID trends continue to improve.”
White House officials were in Rome Friday as part of the Group of 20 economic summit.
Treasury Secretary Janet Yellen spoke to CNBC, saying she was hopeful that the administration’s infrastructure package would be approved soon while saying she does not believe it will add to the inflation problems the U.S. has been experiencing.
“It will boost the economy’s potential to grow, the economy’s supply potential, which tends to push inflation down, not up,” Yellen said during a live “Worldwide Exchange” interview.