Stock futures drop as traders weigh the final batch of corporate profits

Stock futures fell on Friday as investors evaluated more corporate earnings reports and higher US bond yields.

Nasdaq 100 futures fell 0.9%, while futures linked to the Dow Jones Industrial Average lost 133 points, or 0.4%. S&P 500 futures are down 0.5%.

The moves came, as Snap reported quarterly revenue of $1.13 billion, missing expectations. That revenue Represents only 6% annual growth. Average revenue per user, a key metric for the company, fell 11% to $3.11.

Adam Crisavoli of Vital Knowledge writes: “The mentality is quite bleak with stocks for sale pretty much everywhere. The culprit behind the negativity is profits with a slew of disappointments all over the world.”

Meta Platforms shares are down about 4% in the primary market, while Alphabet shares are down 1.8%.

The moves come after indexes fell for a second day, with the Dow losing 90.22 points, or 0.3%. The S&P 500 and Nasdaq Composite were down 0.8% and 0.6%, respectively.

It was a day that started on a better footing for the Dow, which rose nearly 400 points at session highs, but rising Treasury yields threw cold water on stocks. The 10-year Treasury yield is trading at levels not seen since 2008. On Friday, it was trading around 4.26%.

Jimmy Cox, managing partner of Harris Financial Group, said Thursday’s trading fits in with a broader picture of nervous investors making indirect decisions based on today’s news. He said investors are increasingly turning to short-term strategies as they see the Federal Reserve creating a volatile market as it seeks to reduce inflation by raising interest rates.

“Markets are looking for every sign that the inflation data is moving in a way that enables the Fed to cut the pace of interest rates, basically ignoring speakers and conservatives, basically ignoring everything the Fed says,” Cox said.

“It gives way to very volatile trading because people are happy and just waiting for a signal that the hiatus is approaching,” he said. “It’s a bad way to trade and it brings in a lot of volatility.”

Headline rates are still on track for a winning week, up more than 2% through Thursday.