Dow Jones futures fell solidly Friday morning, along with S&P 500 futures and Nasdaq futures. Amazon.com skidded on earnings and President Donald Trump setting tariffs on dozens of countries, including a higher duty on most Canadian goods. The July jobs report is on tap.
Apple, Roku, Coinbase, Reddit, Cloudflare and KLA Corp. also were notable earnings reports.
Reddit stock surged overnight while Apple rose slightly. Cloudflare and KLA edged lower, Roku declined solidly and Coinbase fell sharply.
The stock market rally reversed lower Thursday. The S&P 500 and Nasdaq hit record highs Thursday morning on earnings from Microsoft and Meta Platforms, but they faded into the red while the Dow Jones and Russell 2000 suffered bigger losses. The small-cap Russell and some broad ETFs undercut a key level.
Reddit stock is on the IBD Leaderboard watchlist. Microsoft stock is on the IBD Long-Term Leaders. Cloudflare stock, KLA and Coinbase are on the IBD 50. KLA stock is on the IBD Big Cap 20.
Dow Jones Futures Today
Dow Jones futures sank 0.8% vs. fair value. S&P 500 futures fell 0.8% and Nasdaq 100 futures tumbled 0.95%. Amazon and Apple are Dow Jones, S&P 500 and Nasdaq 100 giants.
The 10-year Treasury yield rose to 4.39% after falling two basis points to 4.36% on Thursday.
Crude oil fell slightly.
The Labor Department will release the July jobs report at 8:30 a.m. ET. A weak report could revive September rate-cut hopes, after Fed chief Jerome Powell and slightly hot core PCE inflation pushed markets to expect no move.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
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Trump Tariff Hikes
Late Thursday, President Trump signed an executive order that would raise tariffs on Canadian goods to 35% from 25%, effective Aug. 7. Goods that fall under the United States-Mexico-Canada Agreement (USMCA) will remain exempt. Earlier, Trump posted on Truth Social that Canada's plan to recognize Palestine would have trade implications.
Trump also set tariffs on dozens of other countries, also effective Aug. 7, including 39% on Switzerland and 20% on Taiwan. The U.S. recently reached deals with the European Union, Japan and South Korea for 15% tariffs.
The baseline rate remains 10%, after Trump threatened 15%-20% recently.
Trump still plans to impose new tariffs on pharmaceuticals, electronics and other sectors in the coming weeks.
Stock Market Rally
The stock market rally saw tech-led early gains turn into losses. Meta and Microsoft initially pushed the Nasdaq and S&P 500 to all-time highs, but even at the highs much of the rest of the market was lackluster.
Along with the core PCE inflation data and some other economic reports, President Trump's comments on drug prices and Mexico tariffs may have weighed on shares.
The Dow Jones Industrial Average gave up 0.7% in Thursday's stock market trading. The S&P 500 index shed 0.4%. The Nasdaq composite only lost a fraction, but was up 1.55% intraday.
The small-cap Russell 2000 and the Invesco S&P 500 Equal Weight ETF both fell 0.9%, while the First Trust Nasdaq 100 Equal Weighted Index ETF skidded 1.75%. All closed below their 21-day moving averages for the first time since April 23.
Meta stock vaulted 11.25%, rebounding from the 10-week line to a new high. Microsoft stock rose nearly 4% but came off all-time intraday highs. Carvana and F5 also gapped up on earnings but closed near session lows.
Carpenter Technology, Ferrari and Shake Shack were earnings losers.
Figma vaulted 250% to 115.50 in its trading debut. FIG stock priced its IPO at $33 a share, above an upwardly revised $30-$32 range for the profitable software maker.
U.S. crude oil prices fell 1.1% to $69.26 a barrel.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF popped 1.3%. The iShares Expanded Tech-Software Sector ETF fell 0.9%, with Microsoft stock a huge holding. The VanEck Vectors Semiconductor ETF slumped 2.5%, with KLA stock a notable component.
The ARK Innovation ETF fell 0.4%. Coinbase and Roku stock are top-five ARK Invest holdings.
The SPDR S&P Metals & Mining ETF declined 0.45%. The Energy Select SPDR ETF lost 0.5%, and the Financial Select SPDR ETF shed 0.6%. The Industrial Select Sector SPDR Fund closed just above the break-even level.
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Amazon Earnings
Amazon earnings and revenue topped Q2 forecasts, but Q3 profit guidance was weak.
Amazon Web Services grew 17%, slightly beating Q2 views but slower than Google Cloud and especially Microsoft's Azure.
Amazon raised capital spending forecasts, joining Google-parent Alphabet, Meta Platforms and Microsoft.
Amazon stock fell sharply in premarket action, signaled a move back toward recent buy points. Shares rose 1.7% Thursday to 234.11, hitting their highest levels since early February.
Apple Earnings
Apple earnings and sales topped fiscal Q2 views, with stronger-than-expected iPhone revenue.
Apple stock rose modestly in extended trade. Shares dipped 0.7% on Thursday. AAPL stock is some distance below its 200-day line amid concerns that the iPhone is stalling out amid competition and a lack of new features, notably in AI.
Roku, Reddit, Coinbase Earnings
Roku stock initially jumped, but reversed modestly lower even though the streaming media platform reported a surprise profit and strong earnings. Shares climbed 2.35% to 94.16 on Thursday after briefly topping a 95.16 buy point on a 50%-deep cup-with-handle base.
RDDT stock surged more than 10% after hours after Reddit earnings and guidance topped forecasts. The social media firm jumped 7.9% to 161.13 on Thursday, clearing some short-term highs and breaking a trendline from the top of a very deep consolidation starting in February. Investors could also use 164.55 as an entry from a too-low handle.
COIN stock dived in premarket trade after Coinbase missed on key metrics. Shares edged up 0.1% to 377.76 on Thursday, holding the 21-day line after pulling back following a huge run to a record 444.64 on July 18.
Cloudflare, KLA Earnings
NET stock tilted lower early Friday after Cloudflare beat estimates and guided higher. The networking and security software maker rose 3.4% on Thursday, nearing late-2021 record highs but extended from buy points.
KLAC edged lower in overnight action after KLA earnings beat and the chip-equipment giant guided higher on fiscal Q1 at the midpoint. Shares slumped 5% to 879.03 on Thursday, moving in sympathy with Lam Research, which reported late Wednesday. KLAC stock fell below an 896.32 buy point but came well off lows after testing the 50-day line, according to MarketSurge.
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What To Do Now
The stock market rally's fade wasn't great, but the uptrend remains well intact. It's still a time to be heavily invested and let winners run. Investors could consider taking some profits, whether it's because stocks are super-extended, breaking key levels, have earnings due — or just to trim overall exposure.
Keep working on watchlists. Some stocks are still setting up and moving out. A market pullback could generate a larger crop of buying opportunities.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
