In evening trading on Thursday, U.S. stock index futures experienced a downturn, influenced by hawkish remarks from Federal Reserve officials and disappointing guidance from tech giant Netflix. Concerns over the potential for prolonged high interest rates were further exacerbated by indications of sustained economic strength in the United States.
Netflix, a prominent player in the video streaming industry, saw its stock plummet nearly 5% in aftermarket trading following a second-quarter revenue outlook that fell short of estimates. Despite a robust first-quarter performance, the subdued guidance raised apprehensions about potential challenges stemming from slowing consumer spending, particularly for major technology firms.
S&P 500 Futures dipped by 0.2% to 5,039.0 points, while Nasdaq 100 Futures declined by 0.4% to 17,484.75 points, and Dow Jones Futures fell by 0.2% to 37,950.0 points by 20:09 ET (00:09 GMT).
The hawkish sentiment persisted among Federal Reserve officials, with Atlanta Fed President Raphael Bostic warning of the possibility of interest rate hikes this year if inflationary pressures persisted. Bostic’s remarks, alongside similar comments from Chair Jerome Powell and other Fed officials, contributed to market unease, particularly after investors recalibrated expectations for a June rate cut.
The market’s fragility was evident in its reaction, with the S&P 500 recording its most significant losing streak since October, dropping by 0.2% to close at 5,011.12 points on Thursday. The NASDAQ Composite declined by 0.5% to 15,601.50 points, while the Dow Jones Industrial Average marginally edged higher, closing at 37,775.38 points.
The chip sector experienced continued losses, with chipmaking stocks facing downward pressure in aftermarket trading. This trend followed TSMC’s cautious outlook despite better-than-expected earnings, with weak demand for smartphones and personal computers dampening overall market sentiment. TSMC’s performance, coupled with ASML Holding NV’s weaker-than-anticipated earnings, weighed on U.S. chipmakers, including NVIDIA Corporation, which experienced a decline of 0.6% in aftermarket trading.
Looking ahead, the first-quarter earnings season is poised to intensify, with reports from Procter & Gamble Company and American Express Company scheduled for Friday. Market watchers are also anticipating earnings releases from notable companies such as Tesla Inc, General Electric Company, and Meta Platforms Inc next week. These reports will likely play a significant role in shaping market sentiment and investor sentiment moving forward.