Even with a solid close in Friday's whipsaw session, the stock market rally suffered significant damage last week, with the major indexes tumbling on hawkish comments from Fed chief Jerome Powell.
The Nasdaq had its worst week since January as megacaps plunged and cloud software crashed.
Apple (AAPL), Amazon.com (AMZN) and Google parent Alphabet (GOOGL) all lost more than 10% for the week, with Facebook parent Meta Platforms (META), Tesla stock and Microsoft stock not far behind. Google stock, Meta, Amazon.com (AMZN) and Microsoft (MSFT) all hit bear market lows. Apple stock and Tesla (TSLA) did not, but they're close.
Meanwhile, Twilio (TWLO) and Atlassian (TEAM) crashed Friday on disappointing results and guidance, losing more than 40% for the week. A slew of other software names tumbled, with or without earnings.
A market rally trying to fight the Fed with major tech sector plummeting? That's a tall order. So while there are some stocks and sectors showing strength, investors should be extremely cautious in the current environment.
Dow Jones Futures Today
Dow Jones futures rose 0.5% vs. fair value, despite Apple stock acting as a drag. S&P 500 futures climbed 0.4% and Nasdaq 100 futures advanced 0.35%. Futures reversed higher from modest-to-solid declines Sunday evening, but have faded from morning highs.
China's exports unexpectedly fell in October, while the country's Covid cases hit a six-month high. Hong Kong's Hang Seng index rose strongly overnight, extending recent gains. Investors are still hoping China's government will ease its zero-Covid policy, as social media chatter has speculated.
Crude oil prices edged lower while natural gas futures spiked 11%. Copper fell 2%.
The 10-year Treasury yield dipped 3 basis points to 4.13%.
The dollar fell slightly after tumbling Friday.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
News
Meta Platforms will cut thousands of jobs, The Wall Street Journal reported Sunday. An announcement could come as soon as Wednesday, the WSJ said. Meta had more than 87,000 employees at the end of September. On Oct. 26, Meta reported a 49% EPS decline in Q3 and slashed guidance amid a metaverse spending splurge. META stock plunged 25% the next day, with shares continuing to slide.
Meta stock rose 3% early Monday.
Late last week, new Twitter owner Elon Musk slashed half of that social media's workforce of 7,500.
Apple said Sunday that "we now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated." That's due to Covid restrictions at a Foxconn plant in Zhengzhou, China. The Apple disclosure isn't a shock given Foxconn's publicized woes. Foxconn warned Monday that the Covid disruptions will hit Q4 earnings.
Apple said 14 Pro and Pro Max remains strong, but shipments will be take longer. The tech giant didn't mention demand for other iPhone models.
Apple stock fell 1% in premarket trading.
Warren Buffett's Berkshire Hathaway on Saturday reported a 20% bump in operating profit. The conglomerate suffered a net loss as the ongoing bear market hit investments.
BRKB stock climbed 1%.
Goldman Sachs now expects S&P 500 earnings to be flat in 2023, down from its prior target of 3%.
