Nasdaq futures experienced a decline on Thursday, foreshadowing a potential descent into correction territory. Stocks continued their downward trajectory, weighed down by disappointing earnings reports from Big Tech companies and the simultaneous increase in bond yields.

The Nasdaq 100 (^NDX) contracts exhibited a nearly 0.9% decrease, highlighting the persistent pressure on tech stocks. This decline followed their worst single-day performance in eight months, which occurred on the previous day.

In parallel, S&P 500 (^GSPC) futures dipped by 0.5%, mirroring the benchmark’s lowest close since May. Dow Jones Industrial Average (^DJI) futures experienced a modest 0.2% decrease, echoing the losses from the previous day.

Earnings have taken the forefront in driving stock movements, as investors react to the disappointing third-quarter reports from major corporations. There is growing concern that valuations remain too high in the face of surging Treasury yields, with the benchmark 10-year yield (^TNX) inching closer to 5% on Thursday.

Although Meta’s (META) earnings surpassed expectations in terms of revenue and profit, initial gains in its stock were reversed after the company’s parent, Facebook, warned about potential adverse effects on its advertising business due to geopolitical unrest. Earnings reports from Amazon (AMZN), Intel (INTC), Ford (F), and Chipotle (CMG) were the highlights on the schedule for Thursday.

Overall, the results from Big Tech companies are contributing to the uncertainty in the stock market, as they fail to provide a clear narrative, unlike previous earnings seasons where they often drove market rallies.

BlackRock’s Global CIO, Rick Rieder, pointed out the dispersion in earnings results, citing Microsoft and Alphabet earnings as examples. He remarked, “We’re getting a series of conflicting signs around the market. That’s why markets are so volatile and uncertain.”

A potential shift in market direction could be influenced by the release of Thursday’s third-quarter GDP reading. As the first estimate, it is anticipated to represent the high point of economic growth in 2023, following a series of data points indicating economic resilience.

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