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Dow Jones, S&P 500, and Nasdaq futures registered gains in after-hours trading late Thursday, buoyed by stronger-than-expected earnings reports from technology giants Apple and Amazon.com. This upward movement followed a significant market retreat earlier in the day, where the Nasdaq composite experienced a notable decline, primarily driven by Meta Platforms and other large-cap technology stocks.
After-Hours Market Rebound
Dow Jones futures advanced 0.1% against fair value, while S&P 500 futures climbed 0.6%, and Nasdaq 100 futures jumped 1.1%. Apple and Amazon, both prominent components of these indices, were key drivers of the late-day surge. However, it is important to note that overnight futures activity does not consistently predict the performance of the subsequent regular trading session.
Earnings Highlights and Market Movers
Apple reported fiscal Q4 results that surpassed analyst expectations, with projections for a robust holiday quarter fueled by demand for the iPhone 17. Apple stock saw a modest rise in extended trade, indicating a potential move beyond a buy zone.
Amazon.com’s earnings also comfortably beat estimates, with its Amazon Web Services (AWS) revenue increasing by 20%, exceeding forecasts. This strong cloud-computing growth aligns with positive reports from peers Microsoft and Alphabet’s Google. Amazon further announced increased capital spending targets for 2025 and 2026, following similar expansion plans from Meta, Microsoft, and Google.
Amazon stock surged over 10% in extended trading, signaling a potential breakout. Shares had previously fallen 3.2% during Thursday’s session, dropping below the 50-day moving average. The stock has a 238.85 cup-base buy point, with Wednesday’s high of 232.82 noted as a possible early entry.
Other companies reporting strong earnings included Western Digital, which saw its stock jump late, reaching a record high following robust results from hard-drive competitor Seagate Technology. Cloudflare’s earnings also beat expectations, leading to a late-hours stock surge that suggested a breakout, nearing a 230.10 flat-base buy point.
Edwards Lifesciences registered a modest increase on its earnings, closing above a buy point. Twilio and Atlassian also moved higher late in the session, with Twilio potentially offering an early entry point.
Thursday’s Market Decline
The broader stock market rally faced headwinds on Thursday, particularly from large technology companies. The Dow Jones Industrial Average closed down 0.25%, the S&P 500 index shed 1%, and the Nasdaq composite slumped 1.6%.
Meta Platforms’ stock experienced an 11.3% decline, attributed to investor concerns regarding its capital expenditure plans. Microsoft also fell 2.9%, and Tesla stumbled, although Google’s stock managed to rise. The market’s breadth was largely negative, even outside of megacap stocks.
The small-cap Russell 2000 index decreased by 0.8%, falling below its 21-day line. Similarly, the Invesco S&P 500 Equal Weight ETF declined 0.4%, reversing from its 50-day line. The First Trust Nasdaq 100 Equal Weighted Index ETF slipped 0.7%, outperforming the Nasdaq but still down after a previous session’s drop.
While some leading stocks like MongoDB flashed buy signals, others showed weakness. The Nasdaq composite, which had experienced a five-session winning streak with narrow breadth, was arguably due for a pullback. It closed Thursday 5.1% above its 50-day line, down from 7% the previous day.
Economic Indicators and ETFs
U.S. crude oil prices saw a slight increase of 0.15%, settling at $60.57 a barrel. The 10-year Treasury yield rose four basis points to 4.09%.
Among growth-focused exchange-traded funds (ETFs), the Innovator IBD 50 ETF shed 2.1%, and the iShares Expanded Tech-Software Sector ETF gave up 1.1%. The VanEck Vectors Semiconductor ETF declined 1.3%, and the ARK Innovation ETF tumbled 4%. In contrast, the Health Care Select Sector SPDR Fund advanced 0.2%, partly due to Eli Lilly’s significant holding within the fund, and the Financial Select SPDR ETF climbed 0.3%.
Market Outlook
The stock market rally remains volatile, with mixed performance beneath the surface amid a busy earnings season. Investors are navigating an environment where individual stock performance can vary significantly, even among those with similar trading strategies. Maintaining flexibility and continuous engagement with market trends are considered key strategies during these periods.
