U.S. stock futures slip amid disappointing tech results, looming labor market data

© Reuters

By Scott Kanowsky

Investing.com -- U.S. stock futures pointed lower on Friday, with traders digesting a string of downbeat results from tech sector heavyweights and awaiting the release of a key U.S. labor market data.

At 06:35 ET (11:35 GMT), S&P 500 futures traded 36 points or 0.86% lower, and tech-heavy Nasdaq 100 futures shed 195 points or 1.52%. The Dow futures contract also dropped by 122 points or 0.36%.

The gloomier sentiment stands broadly in contrast to the end of the prior session when the NASDAQ Composite and S&P 500 ticked higher thanks to softer language on inflation from the Federal Reserve and a promise from Facebook-owner Meta Platforms (NASDAQ:META) to corral costs. However, weakness in health care stocks dragged down the Dow Jones Industrial Average.

Traders were eyeing Apple (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN), and Google-parent Alphabet (NASDAQ:GOOGL), with shares in all three dipping following the release of their latest earnings.

Apple posted fiscal first quarter results that missed analyst expectations, pressured by weaker iPhone sales and production issues in China, while earnings and revenue for the fourth quarter at Alphabet were also hit by slowing online ad spending. Meanwhile, Amazon beat revenue expectations for the fourth quarter but top-line performance from its key cloud business was slightly below estimates.

"All in all, the initial market reaction to last night’s numbers looks disappointing and could lead to some read across in some chip makers, and other related suppliers to the sector," said Michael Hewson, chief market analyst at CMC Markets U.K.

"But we should also remember all three companies have seen big gains in their share prices so far this year, so perhaps it’s time for a bit of a pause as we head into the weekend."

Later on Friday, attention in markets will turn to the January U.S. nonfarm payrolls reading. Mixed data earlier this week have indicated some lingering strength in the labor market, raising concerns that robust employment could keep inflation higher for longer and, in turn, impact the Fed's future interest rate path.

The Labor Department is scheduled to release the figures at 08:30 ET. Analysts are estimating that companies in the world's biggest economy added 185,000 jobs, down from 223,000 in December. The unemployment rate is also seen inching up slightly to 3.6% versus 3.5% last month.

In other corporate news, shares in Nordstrom (NYSE:JWN) soared by more than 30% after the Wall Street Journal reported that activist investor Ryan Cohen is building a large stake in high-end retailer Nordstrom. Citing people familiar with the matter, the paper said Cohen - famous for his bets on meme stocks like GameStop Corp. (NYSE:GME) - is aiming to enact changes to the company's board and slash costs.

Elsewhere, U.S. crude futures were 0.20% lower at $75.73 a barrel by 06:35 ET, while the Brent contract was down 0.18% at $82.02 per barrel.

Additionally, gold futures dipped by 0.17% to $1,927.45/oz, while the EUR/USD edged up 0.21% to 1.0933.