(Reuters) -U.S. stock futures struggled for traction on Friday, after a wobbly week for Wall Street amid concerns about the economy and sky-high valuations in the technology sector.
The three main U.S. indexes ended sharply lower in the previous session, with the tech-heavy Nasdaq falling almost 2% after Wall Street executives earlier this week warned a market correction could be on the way.
Optimism around artificial intelligence has pushed markets to all-time highs this year, but concerns over monetization of the technology and circular spending within the industry has dampened enthusiasm for U.S. stocks in recent days.
“Markets are grappling with the excitement surrounding how impactful (and ideally profitable) these technologies could be in the future, tempered by the concern that the expectations implied by current valuations are too high,” said Thomas Shipp, LPL Financial’s head of equity research.
At 06:02 a.m. ET, Dow E-minis were down 27 points, or 0.06%, S&P 500 E-minis were down 6.25 points, or 0.09%, and Nasdaq 100 E-minis were down 39.25 points, or 0.16%.
Tesla gained 0.7% in premarket trading after shareholders approved the largest corporate pay package in history for Musk, signaling confidence in his vision to morph the EV maker into an AI and robotics juggernaut.
Intel shares added 1.6% after Musk said it could be ‘worth having discussions’ with the company to make chips.
With third-quarter earnings season in its final stretch, 83%of 424 companies in the S&P 500 that have reported results so far have beaten Wall Street expectations, according to Thursday’s LSEG data.
This is the highest rate of better-than-expected results the since second quarter of 2021. Typically, 67% of companies beat estimates in a quarter.
Peloton Interactive shares 7.9% after the fitness products maker reported first-quarter revenue above estimates.
Sandisk shares added 6.4% after first-quarter results. Shares of other data storage companies also rose.
Block missed third-quarter profit expectations amid economic uncertainty and intensifying competition in the payments sector, sending its shares down 14.1%.
ECONOMIC CONCERNS LINGER
The longest U.S. government shutdown in history has led to a data hole with Federal Reserve officials and traders alike having to depend on private sector indicators to gauge the health of the economy.
On Thursday, data from executive outplacement firm Challenger pointed to a surge in October layoffs, while workforce analytics company Revelio Labs showed the U.S. economy shed 9,100 jobs last month, leading to renewed concerns about the labor market.
With the data-dependent Fed flying blind before December’s policy meeting, policymakers are divided on the best approach with inflation worries lingering.
Traders are currently pricing in a 65% chance of a 25-basis-point rate cut in December, lower than last month’s 82%, according to CME Group’s FedWatch tool.
Among other moves, Expedia jumped 16.6% after the online travel platform boosted its forecast for full-year revenue growth and posted third-quarter profit above expectations.
Take-Two Interactive delayed its popular video game GTA VI to November 2026, sending shares falling 4.5%.
(Reporting by Twesha Dikshit in Bengaluru; Editing by Krishna Chandra Eluri)
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