Stock futures slipped in early morning trading Friday as shares of major technology companies suffered following disappointing earnings reports.
S&P 500 futures and Nasdaq 100 futures both traded in negative territory. Futures on the Dow Jones Industrial Average were 76 points lower.
Amazon shares dropped 4% in extended 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 also fell more than 3% in after hours trading after the tech giant’s quarterly revenue fell short of expectations amid larger-than-expected supply constraints on iPhones, iPads and Macs.
The overnight action came after the S&P 500 and the tech-heavy Nasdaq Composite closed Thursday’s session at record highs as investors shrugged off disappointing economic data.
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.
“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.”
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.
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%.