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Stock market news today: Nasdaq futures sink with earnings in driver’s seat

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Nasdaq futures fell on Thursday, as stocks continued to sink under the weight of disappointing Big Tech earnings reports and rising bond yields.

Contracts on the Nasdaq 100 (^NDX) dropped about 0.5%, signaling tech stocks are still under pressure after booking their worst single-day performance in eight months on Wednesday.

Meanwhile, S&P 500 (^GSPC) futures were down 0.3% in the wake of the benchmark’s lowest close since May. Dow Jones Industrial Average (^DJI) futures traded flat.

Earnings are in the drivers seat for stocks, as investors punish megacaps whose third-quarter reports turned out more downbeat than hoped. Concerns are growing that valuations are too high in a world of surging Treasury yields, as the benchmark 10-year yield (^TNX) climbed back near 5% on Thursday.

While Meta’s (META) earnings beat on the top and bottom lines, its shares reversed initial gains after the Facebook parent warned geopolitical unrest could drag on its ad business. The flow of earnings resumes Thursday, with Amazon (AMZN), Intel (INTC), Ford (F) and Chipotle (CMG) the highlights on the docket.

Overall, Big Tech results are seen as not providing a clear story at a time when the stock market needs one, which could mean they won’t be enough to drive a rally as in previous earnings seasons.

“There’s real dispersion,” BlackRock’s Global CIO Rick Rieder said, noting Microsoft and Alphabet earnings. “We’re getting a series of conflicting signs around market. That’s why markets are so jumpy, so uncertain.”

In one positive development, Thursday’s third-quarter GDP reading came in hot with the US economy growing at its fastest pace in nearly two years.

The Bureau of Economic Analysis’s advance estimate of third quarter US gross domestic product (GDP) showed the economy grew at an annualized pace of 4.9% during the period, faster than consensus forecasts.

The strong data comes despite the Federal Reserve’s higher for longer interest rate mantra, which has failed to constrain the American consumer. The Fed’s next interest rate decision is scheduled for Nov. 1

Other central banks are beginning to shift their monetary policy. On Thursday, the European Central Bank held interest rates steady for the first time in over a year following ten consecutive rate increases.

The ECB said it would hold its deposit rate at a record high 4%. The bank maintained its previous guidance of steady policy moving forward.

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GDP: US economy grows 4.9% amid strong consumer spending

The US economy grew at its fastest pace in nearly two years during the past three months as consumers stepped up their spending despite a high interest rate environment.

As Yahoo Finance Josh Schafer reports:

The Bureau of Economic Analysis’s advance estimate of third quarter US gross domestic product (GDP) showed the economy grew at an annualized pace of 4.9% during the period, faster than consensus forecasts. Economists surveyed by Bloomberg estimated the US economy grew at an annualized pace of 4.5% during the period.

The reading came in higher than second quarter GDP, which was revised down to 2.1%.

The GDP release highlights the resilience of the US consumer despite ongoing concerns of a slowdown. But many economists see this as the high water mark for economic growth before the credit tightening induced by the Federal Reserve’s interest rate hikes and the recent rise in bond yields grabs hold of business development and consumer spending.

Read more here.
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Stock futures point to a return to sell-off

Wall Street stocks were on track Thursday to add to the previous day’s sharp losses, as investors looked ahead to fresh earnings releases.

Futures on the Dow Jones Industrial Average (^DJI) were down 0.41%, or 136 points, while S&P 500 (^GSPC) futures shed 0.67%. Contracts on the tech-heavy Nasdaq 100 (^NDX) were 0.95% lower.