Amazon’s Earnings Spark Optimism in U.S. Stock Market

On Friday, U.S. stock index futures suggest a favorable start after a difficult week. This is primarily credited to the impressive showing by Amazon.com, a prominent tech firm, as well as the unveiling of fresh information regarding spending patterns and inflation.

What’s happening

• The Dow Jones Industrial Average futures, YM00, rose by 29 points or 0.1%, resulting in a total of 32907. This marks a 0.18% increase.
• The value of S&P 500 futures, ES00, rose by 0.23%, equivalent to a 0.5% increase, resulting in a total of 20 points and reaching a value of 4176.
• The NQ00, which refers to the Nasdaq 100 futures, experienced a 0.9% increase, resulting in a rise of 127 points to reach 14319. This positive movement reflects a 1.08% overall growth.

On Thursday, the Dow Jones Industrial Average fell by 252 points, representing a decrease of 0.76% and bringing the index to 32784. Similarly, the S&P 500 experienced a decline of 50 points, or 1.18%, resulting in a new value of 4137. The Nasdaq Composite also witnessed a drop of 226 points, equivalent to 1.76%, reaching 12596.

According to UBS, most companies in the S&P 500 have seen a decrease in their stock prices since Friday, leading to a 2.1% decline in the overall index over the course of the week.

What’s driving markets

Amazon.com reported profits that were higher than anticipated, showing improvement in its retail division and cloud services. Similarly, Intel exceeded expectations with a significant increase in profits. In contrast, Tesla Inc., Alphabet Inc., and Meta Platforms Inc., which were grouped together as the “Magnificent Seven,” announced disappointing earnings.

Krupa Patel, who is in charge of international market intelligence at JPMorgan, said that the strong financial results of American technology companies like Amazon and Intel yesterday, combined with higher-than-expected profits in the industrial sector in China this morning, have increased the overall willingness to take risks in the global market. Consequently, stocks in all parts of the world are experiencing positive trading activity.

Investors were closely monitoring the recent PCE data, the Federal Reserve’s preferred gauge of inflation. The PCE price index revealed that the prices of goods and services rose by 0.4% in September, exceeding expectations. Nevertheless, core inflation aligned with the projected outcome.

Consumer spending showed a notable rise of 0.7% in September, providing further evidence of the robust spending trends previously observed in retail sales data.

The University of Michigan will give investors a consumer sentiment update later in the morning.

In September, China reported a growth of 11.9% in industrial profits compared to the previous year.

Nevertheless, there were some negative developments regarding the financial performance. Ford Motor Co. opted to retract their guidance, while Enphase Energy, a solar company, released a warning about their profits.

The cost of oil for upcoming delivery rose after the United States conducted a military strike on Syrian facilities linked to Iran.

FactSet predicts that the S&P 500 is expected to end the week with yet another drop, adding to its ongoing trend of consecutive weekly decreases. This indicates that U.S. stocks are still displaying weak performance.

Companies in focus

• Amazon.com Inc. (AMZN) experienced a significant 5% rise in share value during premarket trading, as the company delivered a remarkable financial performance that exceeded anticipated results.
• Intel Corp’s shares, traded under the ticker symbol INTC, saw a noteworthy rise of 10.29%, soaring by 8% after the company’s impressive performance in the third quarter exceeded market expectations. Furthermore, Intel offered a positive projection for the current quarter.
• Ford Motor Company experienced a 4% decline in its stocks after deciding to withdraw its guidance. This decision was made due to an imminent agreement with the United Auto Workers. Additionally, the disclosure of a substantial loss of $1.3 billion in Ford’s electric vehicle division also influenced the value of the stocks.
• Exxon Mobil Corp, a prominent oil corporation, saw a 0.3% decrease in premarket trading on Friday. This decline was caused by their third-quarter financial report, which unveiled lower profits and revenues than anticipated due to a decrease in production. Nevertheless, the company surpassed expectations considerably in terms of their free cash flow.
• On Friday, Chevron Corporation’s stock, represented by the ticker symbol CVX, experienced a 1.4% decrease in premarket trading. This decline can be attributed to the company’s third-quarter earnings being notably lower than anticipated.