U.S. stock futures gained, boosted by a jump in Amazon.com and Snap shares in offhours trading, after a volatile session marked by a selloff in technology stocks.
Futures for the S&P 500 rose 1.1% Friday. Major U.S. stock indexes tumbled Thursday, dragged down by technology and social-media companies, as Facebook owner Meta Platforms plunged after a disappointing earnings report. Contracts for the tech-focused Nasdaq-100 added 1.7% Friday and futures for the Dow Jones Industrial Average gained 0.6%.
Amazon.com shares rallied 14% offhours after the e-commerce giant said profit nearly doubled in the critical holiday period, as the company managed to control labor and supply costs better than expected and saw gains in its cloud-computing and advertising businesses.
Sharp moves in the share prices of large technology and social-media companies have an outsize impact on broader indexes. Amazon.com had a 3.3% weighting on the S&P 500 as of Wednesday, according to data from S&P Dow Jones Indices. Meta, whose shares tumbled Thursday, had a 2% weighting.
“In the U.S., the big tech stocks make up a very large part of the index,” said Mike Bell, global market strategist at J.P. Morgan Asset Management. “There’s been big differentiation between the big growth stocks. Those companies which have continued to deliver strong results have held up relatively well. Those companies which were priced as heavily valued growth stocks but then under-delivered are getting hit extraordinarily hard.”
Earnings are due ahead of the market open from Bristol-Myers Squibb, Regeneron Pharmaceuticals and Cboe Global Markets. Investors are also awaiting fresh data about the U.S. labor market in the monthly jobs report, due at 8:30 a.m. ET. Economists surveyed by The Wall Street Journal have estimated that employers added 150,000 jobs in January.
In bond markets, the yield on the benchmark U.S. 10-year Treasury note ticked up to 1.829% from 1.825% Thursday. Yields and prices move inversely. Oil prices climbed, with the global benchmark Brent crude up 0.7% to $91.73 a barrel.
Global markets have been volatile in recent weeks. Expectations that the Federal Reserve will raise interest rates for the first time since 2018 have led investors to shift toward investments that are deemed safer, such as stocks of companies that pay regular dividends. The Bank of England on Thursday raised its key interest rate for a second consecutive meeting, while the European Central Bank President Christine Lagarde pointed to higher inflation and signaled that a policy shift could also be forthcoming.
Since the start of this year, the Nasdaq Composite has lost more than 11%, while the S&P 500 has slid 6.1%. The Dow, in comparison, has fallen 3.4%.
The market volatility could continue until the Fed implements its first interest-rate increase and investors get used to the idea of rising rates, said Peter Andersen, founder of Massachusetts-based investment firm Andersen Capital Management.
“The fact that everything is sold off wholesale is really, in my opinion, a buying opportunity,” Mr. Andersen said. “Every investor is so spooked now, and nobody really has a compass to figure out where exactly we are in this cycle.”
Overseas, the pan-continental Stoxx Europe 600 rose 0.5%. In Asia, stocks in Hong Kong resumed trading following a three-day holiday closure. The Hang Seng Index added 3.2%, led by gains in banking and technology stocks. Japan’s Nikkei 225 index rose 0.7%.
Write to Dave Sebastian at [email protected] and Caitlin Ostroff at [email protected]
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