(Bloomberg) — US equity futures slipped in choppy trading as investors parsed a flood of big-name second-quarter earnings for clues on how well companies are coping with surging prices. Bonds extended an advance.
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Contracts on the tech-heavy Nasdaq 100 declined about 0.3%, weighed down by Snap Inc.’s poor results. Futures on the S&P 500 came off session lows after American Express Co. reported record revenue and raised full-year forecasts. The Stoxx Europe 600 Index added 0.6%.
In other earnings news:
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Twitter Inc. sank in premarket trading after posting disappointing second-quarter sales.
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Verizon Communications Inc. slumped after it missed profit estimates and cut guidance.
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AT&T Inc. fell the most in 20 years after cutting its forecast for free cash flow this year.
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HCA Healthcare Inc. soared after an earnings beat.
Global stocks remain on course for their best week in a month, paring this year’s equity market rout to about 18%. Speculation that the worst of the selloff has passed is partly behind the move. Angst about the damage from inflation and rapidly rising interest rates is proving hard to shake — despite a tempering in expectations of just how aggressive the Federal Reserve will be.
“It’s still very early days but we’ve seen numerous cases now of earnings surprises driven by the ‘it’s not as bad as we feared’ argument,” said Craig Erlam, a senior market analyst at Oanda. “That’s a relief of course, but surely not a case for a sustainable rebound.”
Underscoring recession fears, Treasuries extended an advance, pushing the 10-year yield to around 2.8%. German short-term bonds soared as investors trimmed bets on European Central Bank rate hikes after weaker-than-expected PMI data in the region fanned fears of a recession. US PMIs are due at 9:45 a.m.
Snap’s disappointing revenue hit social media stocks, including Twitter, Facebook parent Meta Platforms Inc. and Google owner Alphabet Inc. Hardware and storage companies including Micron Technology Inc. and Western Digital Corp. fell after Seagate Technology Plc’s earnings miss and weak outlook.
Read more: Company Forecasts Are Showing Inflation Cracks: Earnings Watch
Friday’s losses mark the second major sector selloff sparked by Snap in two months, as its results become a barometer for ad spending amid mounting economic fears. There are growing signs that tech companies are preparing for a recession with some pulling back on hiring, while Meta has lost about half of its value this year after disappointing revenue forecasts.
Focus will now turn to the Fed’s meeting next week, where the central bank is again expected to increase interest rates to tame scorching inflation.
Some of the main moves in markets:
Stocks
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Futures on the S&P 500 fell 0.1% as of 8:37 a.m. New York time
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Futures on the Nasdaq 100 fell 0.3%
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Futures on the Dow Jones Industrial Average rose 0.2%
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The Stoxx Europe 600 rose 0.6%
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The MSCI World index rose 0.2%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro fell 0.5% to $1.0183
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The British pound fell 0.2% to $1.1966
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The Japanese yen rose 0.5% to 136.66 per dollar
Bonds
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The yield on 10-year Treasuries declined seven basis points to 2.81%
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Germany’s 10-year yield declined 17 basis points to 1.05%
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Britain’s 10-year yield declined seven basis points to 1.98%
Commodities
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West Texas Intermediate crude fell 0.9% to $95.53 a barrel
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Gold futures rose 0.6% to $1,741 an ounce
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