HG MARKETS:

U.S. stock futures fell sharply on Friday due to disappointing quarterly results and growing anticipation for the July payrolls report. The Dow Jones Industrial Average futures dropped by 317 points (0.8%), S&P 500 futures decreased by 1.1%, and Nasdaq 100 futures fell 1.8%.

Intel Corporation’s latest earnings report raised significant concerns about the company’s future. The chipmaker’s stock plummeted by 20% in premarket trading, marking its worst one-day decline since 2000. This sharp drop followed weaker-than-expected earnings and revenue for Q2, alongside a $10 billion cost-cutting plan that includes laying off over 15% of its workforce. The negative outlook for Intel heavily impacted market sentiment.

Amazon also weighed on the market, with its shares falling 8% after missing revenue expectations for Q2 and providing a disappointing forecast. This decline is part of a broader sell-off in the tech sector, which has affected investor confidence.

In contrast, Exxon Mobil reported strong Q2 earnings, driven by record production in Guyana and the Permian Basin. Its earnings per share were $2.14, beating the forecast of $2.01. Despite this robust performance, Exxon Mobil’s shares saw a slight dip in premarket trading.

All eyes are now on the upcoming July jobs report, which is expected to influence market movements. The Labor Department is anticipated to report an addition of 185,000 jobs in July, with the unemployment rate likely holding steady at 4.1%. Average hourly wages are projected to increase by 0.3% month-over-month and 3.7% year-over-year. This report comes amid rising recession fears due to recent weak economic data.

Thursday’s market sell-off highlighted concerns about the Federal Reserve’s monetary policy timing. Both the Dow and S&P 500 fell by more than 1%, while the Nasdaq dropped 2.3%. Quincy Krosby from LPL Financial noted that there is skepticism about whether the Fed is adjusting its policies in time. Arnim Holzer from EAB Investment Group pointed out increased market volatility, particularly in the tech sector, which could destabilize the market. The Russell 2000 index, which tracks small-cap stocks, experienced its worst day since February, falling 3%.

Given the current situation, the market outlook remains cautious. The combination of disappointing earnings from major tech firms like Intel and Amazon, along with the upcoming jobs report, suggests a bearish short-term outlook. Investors should brace for continued volatility as economic indicators and corporate earnings continue to shape market trends.

Dow Jones Industrial Average futures are struggling for the second consecutive session on Friday, pressured by poor performances from Dow components Amazon and Intel. The market is currently testing the July 24 low at 40,053. If it breaks this level, the trend could shift downward. Also, the 50-day moving average at 39,837 is on the radar. A bounce might occur on the first test of this level, but failure to hold could lead to further declines, with the next major target being the 200-day moving average at 38,765.