Andrew Kelly/Reuters
- US tech futures rose on Friday, boosted by strong earnings from Amazon and Snap.
- The Nasdaq 100 logged its biggest one-day drop in 17 months on Thursday as Meta plunged 25%.
- Investors were awaiting jobs payrolls to determine the resilience of the US economy.
US tech futures rallied on Friday, after strong earnings from the likes of Amazon and Snap laid the foundations for a more upbeat start to the day later, when the government releases its all-important January jobs report.
Nasdaq 100 futures were up 0.8% in Europe, while S&P 500 futures rose 0.1%, and those on the Dow Jones eased 0.3%, after the Nasdaq 100’s largest one-day decline since September 2020 on Thursday, when Facebook parent Meta saw over $230 billion wiped off its market value after disappointing earnings.
Amazon stock jumped 13% in pre-market trading on Friday as investors cheered its strong fourth-quarter earnings the day before, in which it raised the price of its Prime subscription service.
Snapchat parent Snap meanwhile skyrocketed by as much as 60% in Friday’s pre-market after posting its first-ever profitable quarter. Its shares were last up 51%, having fallen by almost 25% in regular trading on Thursday.
“The stomach-churning rollercoaster ride on the financial markets is set to continue, with a lurch back upwards expected for indices in Europe and the US as encouraging results from Amazon and Snap laid the groundwork for a relief rally at the end of a tumultuous week,” said Susannah Streeter, senior investment and markets analyst, at Hargreaves Lansdown.
If the jump in the stock holds when trading opens at 9.30 a.m. ET, Amazon would add nearly $180 billion in market value in what would be one of the biggest valuation gains in history. Its market capitalization stood at $1.41 trillion as of Thursday’s close.
“Amazon had much better fortune in its after-hours earnings release,” Deutsche Bank strategists said in a note. “Remember when Amazonification was the clarion call of the no-inflation crowd? Well there is now some evidence of the opposite.”
After a flurry of mixed earnings for Big Tech, investors were awaiting Friday’s non-farm payrolls report later in the day. Economists expect to see an increase of 150,000 in January, which would be the slowest rate of growth since December 2020, as the Omicron variant and a severe labor shortage took their toll on the jobs market.
Industries like hospitality, leisure and healthcare are expected to be the hardest-hit sectors, Hargreaves Lansdown said.
Slower job growth would mean that the Federal Reserve may not have to take as aggressive a stance towards monetary policy, which could spell relief for government bonds and battered tech stocks and cryptocurrencies.
A stronger reading however might reignite concerns that the Fed will have to act fast to stop the economy from overheating.
“One of the main highlights today will be the US jobs report for January, which will be an important release as the Fed looks to commence lift-off next month,” Deutsche Bank said.
Oil rose on Friday towards seven-year highs, as a winter storm swept across the United States, which could disrupt crude supplies exactly as higher demand kicks in. WTI crude futures rose 1.3% to around $91.72 a barrel, near seven-year highs, while Brent crude gained 1.4% to trade around $92.35 a barrel.
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