U.S. Stock Futures Point to Third Consecutive Decline

U.S. stock futures are indicating a third consecutive decline, with investors keeping a close eye on upcoming tech earnings and a major jobs report.

Market Performance

• Dow Jones Industrial Average futures (YM00) are down 102 points, or 0.3%, at 35,301.
• S&P 500 futures (ES00) have dropped 13 points, or 0.3%, to 4,524.
• Nasdaq 100 futures (NQ00) are down 54 points, or 0.4%, at 15,419.

Recent Trends

Yesterday, the Dow Jones Industrial Average (DJIA) fell 348 points, or 0.98%, to close at 35,283. The S&P 500 (SPX) declined by 63 points, or 1.38%, ending the day at 4,513. Meanwhile, the Nasdaq Composite (COMP) dropped 310 points, or 2.17%, to settle at 13,973.

Factors Affecting Market Sentiment

Investors reacted negatively to news that private-sector payrolls experienced significant growth in July. This development cast doubt on the possibility of the U.S. Federal Reserve initiating another interest-rate hike this cycle. On Friday, the U.S. Labor Department will release the official nonfarm payrolls report, which is highly anticipated.

Another aspect impacting market sentiment is the decision made by Fitch Ratings to downgrade the U.S. credit rating. However, this move has faced criticism from observers such as former Treasury Secretary Larry Summers and JPMorgan Chairman and CEO Jamie Dimon.

AMD’s Stock Falls Despite Positive Earnings Reaction

Tech companies this earnings season have been struggling to see positive share-price reactions to their results, and chipmaker Advanced Micro Devices (AMD) is no exception. Despite an initially positive response to its earnings, AMD’s stock ended the day lower.

According to Evercore ISI, the average stock price reaction for the 368 S&P 500 companies that have reported their results so far is -0.7%.

Senior investment analyst at XM, Charalampos Pissouros, stated that while this slide doesn’t suggest a major trend reversal, a correction may continue if incoming U.S. data forces market participants to revise their implied Fed rate path. The U.S. jobs report on Friday will be a key factor in the market’s assessment.

Meanwhile, equity traders will keep a close eye on the upcoming earnings results from Apple and Amazon.com, both of which are scheduled to be released after the closing bell today.

On Thursday, additional data on jobless claims, second-quarter productivity, and the Institute for Supply Management services index will be made available.