Stock market news today: US futures tumble across the board as growth fears, Big Tech earnings spook market
08/02/2024 18:00The flight from stocks is accelerating as Big Tech earning misses add to recession jitters in the countdown to the July jobs report.
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.
The gauges are headed for deeper losses after Intel spooked investors already grappling with worries about the risk of a US recession. 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. Both quarterly reports landed hard with investors already questioning the payoff of AI investments after this week's string of lackluster Big Tech earnings.
The sell-off comes as Wall Street wonders 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.
The monthly jobs report is now 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%.
Live1 update
What Intel's CEO told me with the stock crashing
I had a tough chat last night with Intel (INTC) CEO Pat Gelsinger following the company's whopper of an earnings miss, shockingly bad guidance, a dividend suspension and a 15% headcount reduction.
I appreciate he always steps up to the mic on Yahoo Finance (I have covered his entire Intel career) whether the quarter is good or bad, and this one was really not good at all. But wow with this one.
"This is the biggest restructuring of Intel I'd say since the memory microprocessor decision four decades ago," Gelsinger told me.
Gelsinger says he is in it for the long haul despite being disappointed in the quarter and outlook.
"This is what I signed up for [when I came in as CEO]," Gelsinger added.
As no surprise, the Street's reaction this morning is pretty brutal.
I left my chat with Gelsinger thinking Intel may not show green shoots of any kind (sales, margins, cash flow) deep into 2025. It's going to take some time to repair investor trust and drive a Street upgrade cycle on a stock that is now severely beaten down.
Tough to see on such an iconic American company.