Trader on the New York Stock Exchange

Source: NYSE

Futures contracts, which were pegged to major U.S. stock indices, gave way early Friday as investors pondered a flurry of earnings results and a robust profit blow from e-commerce giant Amazon.

Contracts related to the S&P 500 were down 0.6%, while contracts related to the Dow were down 150 points. Nasdaq 100 futures fell about 0.7%.

The off-hours movements took place after the end of regular trading amid a flurry of income activity.

Amazon, the last Wall Street mega-cap tech company to release results, posted record earnings in the first quarter. The Seattle-based company announced that profits more than tripled to $ 8.1 billion and sales grew 44% to $ 108 billion from January to March. The results exceeded Wall Street’s expectations and the company deserved it $ 15.79 per share versus consensus estimate of $ 9.54.

Amazon’s results showed that demand for its massive online retail business remained strong, even though the economy gradually opened up. The blowout results also showed large increases in high-growth cloud computing and advertising businesses.

Shares rose 2% ahead of the trading session, but that wasn’t enough to lift sentiment for the entire market.

Twitter moved in the opposite direction in terms of user growth results and revenue guidance for the second quarter, which lagged behind analysts’ forecasts. According to the social media platform, monetizable daily active users for the three months ended March 31 were 199 million and reported earnings per share of 16 cents. Twitter fell 12% in premarket trading.

Apple came under slight pressure in the pre-market after the European Union announced that the company’s App Store was violating its competition rules. The shares fell 0.7% in premarket trading.

Exxon Mobil, Chevron and Colgate-Palmolive report profits on Friday before the bell. Chevron stocks fell after quarterly EPS failed to beat expectations. Colgate-Palmolive gained 1.5% in premarket trading after beating its income statement for its quarterly results.

Twitter and Amazon stock performance is likely to affect the S&P 500 on the last trading day of the week. The index closed on Thursday after the results from Apple and Facebook at a record level.

The Dow Jones Industrial Average ended the regular session up 0.7%, while the S&P 500 gained just under 0.7% to end the day at 4,211.47, a new closing high. The tech-heavy Nasdaq Composite, which started the day up 1%, lagged behind its performance by a little more than 0.2%.

So far this week, the S&P 500 is up 0.75%, the Dow is up less than 0.1% and the Nasdaq Composite is up 0.47%.

Wall Street will also keep an eye on personal income and expense data, which is due to be released Friday morning at 8:30 a.m. ET. This data could give investors and the Federal Reserve valuable insight into how fast prices are rising in the U.S. economy as it recovers from the Covid-19 pandemic.

Fed chairman Jerome Powell told reporters Wednesday that the central bank would have to hold inflation at around 2% “for some time” before curbing supportive asset purchases and interest rates near zero.

“All arrows point to further spike in inflationary pressures. Remember, the Fed knows this; they are prepared for this,” wrote Patrick Leary, chief market strategist at Incapital. “While I’m not going to say whether the inflation we are seeing right now will actually be temporary or more sustainable, I am willing to bet it will rise higher and last longer than the market will tolerate.”

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