The S&P 500 was sharply lower on Thursday, losing almost 2%.
SPX 500 – Daily Chart
The SPX 500 failed to regain its recent resistance on Thursday, and weakness into the close could lead to a further downturn.
Losses are a worry ahead of Amazon and Apple earnings after Friday’s close and job data. Analysts expect to see 175k jobs added after 206k last month when a rise in weekly jobless claims drove lower stocks.
Meta Platforms bucked the selling with a rise of more than 6% after reporting stronger-than-expected Q2 revenue. According to Bloomberg, most companies have beaten their earnings consensus. However, only 43% have beaten revenue expectations, the lowest in five years.
Stocks had rallied on Wednesday after the Fed signalled at its policy meeting that a long-awaited rate cut is coming in September. The Fed also noted that inflation is now only “somewhat” elevated after a recent slowdown.
However, recent data have investors worried that the central bank may be forced to cut even further if the threat of a recession picks up.
Wayfair CEO Niraj Shah said in an earnings statement that “customers remain cautious in their spending on the home” and that credit card data suggests “the category correction now mirrors the magnitude of the peak to trough decline the home furnishing space experienced during the great financial crisis.”
Investors will keenly see Amazon and Apple’s performance going into Friday—some weakness hinting at a possible sell-off. A weaker job number could also hurt the market going into next week.
