US equity market futures indicate a gap-down opening on Friday, October 30, with Nasdaq 100 futures plummeting 2.6% to hover around 28,970.75 points and S&P 500 futures down 1.1% trading around 7,672 points. According to ZeroHedge, Dow futures are up 0.1% at 52,575 and Russell 2000 futures are down 0.5%, indicating a mixed market opening. The subdued performance comes amid significant weak cues from global markets and investor focus on quarterly earnings from major technology companies. As reported by ZeroHedge, the losses come after a session in which the S&P fell 0.3% and the Nasdaq 1.4% even as 406 S&P members rose and the equal-weight index hit its highest since August, a reminder that the market is rotating rather than running for the exits.
Major technology earnings from companies like Amazon and Intel have exacerbated the tech sell-off, with subdued guidance and results missing market expectations further impacting benchmark indices. According to ZeroHedge, Amazon's Q3 net sales fell just short of analyst expectations ($201.94bn vs $202.26bn est.) while spending on property and equipment soared in the quarter ($77bn vs $59bn est.). Amazon shares slumped by 7% in extended trading, with the company's cloud revenue growth being insufficient to ease concerns about the rising capex spend. Intel plunged by 23% after-hours after its Q4 revenue guidance missed estimates ($15-16bn vs $17.05bn est.). The tech-heavy Nasdaq's significant decline reflects investor concerns about the sustainability of AI-driven investments in the current market environment, with the Nasdaq now tracking its biggest monthly underperformance against the equal-weighted S&P since 2002, with its members having wiped out more than $1.2 trillion in market cap this month.
Global crude oil prices rallied nearly 3% to touch an intraday high of $118 per barrel on Friday's market, with benchmark Brent crude climbing 2.5% to $117.76 after nearly reaching $118 overnight, as reported by ZeroHedge. WTI rose 1.7% to around $103.50-104. Iran claimed two oil tankers were hit by incidents and stopped in Hormuz, after a Panama-flagged tanker and a dhow were hit in the strait on Thursday. Reports continue to point to US strikes on Iran after the midterms, with the Houthis saying they targeted Ras Tanura, Abqaiq and Rabigh, and Exxon and Chevron canceled plans to attend the Abu Dhabi oil conference. Goldman's commodities team estimates Brent embeds a $27/bbl geopolitical risk premium over its ~$85 fair value. The mixed signals of another potential attack on Iran after the upcoming midterm elections continue to flare up crude oil prices during Friday's market session.
The sentiment was further impacted by a heated US PCE inflation report released on October 29, which continued to dent trader sentiment and increase bets on an upcoming US Fed rate hike in the December policy meeting. Despite elevated oil prices and increasing market uncertainty, the benchmark US 10-year Treasury yields remained steady at 4.9% levels as of 8:22 am ET on Friday. However, 10-year yields fell 8.0 basis points to their lowest level in 6 weeks at 4.94% in premarket trading, as reported by ZeroHedge, with the tech selloff supporting Treasuries. The retreat in energy prices also supported European bonds yesterday, but oil prices have moved higher again overnight on fresh concerns about US-Iran escalation.
