(Bloomberg) — European stocks and US equity futures dropped as disappointing earnings from Apple Inc., Amazon.com Inc. and Alphabet Inc. poured cold water on the rally fueled by investor optimism that rates are getting close to peaking.
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Positive sentiment from this week’s surge in the Nasdaq 100 and S&P 500 evaporated as investors parsed late results from the tech trio that showed an economic slowdown is throttling demand for electronics, e-commerce, cloud computing and digital advertising.
Investors have been cheering what they perceive as varying degrees of dovish tilts from central banks this week. Chair Jerome Powell said Wednesday the Federal Reserve had made progress in its inflation battle even as labor-market data continues to show tightness that could add to wage pressures. Payrolls data due later Friday may show the US jobs market softening, complicating the Fed’s task.
The Stoxx Europe index retreated after closing within a whisker of a bull market on Thursday, with all industry groups in the red on Friday. Carmakers led the decline, following their US counterparts lower after Ford Motor Co.’s fourth-quarter profit fell short of analysts’ estimates.
Treasury yields ticked lower and a gauge of the dollar gained for a second day.
Asian shares were mixed, with a regional index slipping with Chinese stocks while Japanese and Australian benchmarks eked out gains.
There was no respite in the rout of Gautam Adani’s companies. All 10 of the group’s stocks fell as the Indian billionaire battles to restore confidence in his conglomerate’s financial health after accusations of fraud by short-seller Hindenburg Research. Shares of Adani Enterprises Ltd. dropped 35%, the most ever during intraday trading, before paring loss.
Elsewhere in markets, oil headed for a second weekly drop as optimism over a recovery in Chinese demand dimmed and US stockpiles kept rising.
Gold rose slightly after slumping almost 2% on Thursday as traders sold off haven assets amid renewed optimism developed nations including the US are reining in inflation.
Key events this week:
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Eurozone S&P Global Eurozone Services PMI, PPI, Friday
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US unemployment, nonfarm payrolls, Friday
Some of the main moves in markets:
Stocks
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The Stoxx Europe 600 fell 0.5% as of 8:15 a.m. London time
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S&P 500 futures fell 0.9%
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Nasdaq 100 futures fell 2%
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Futures on the Dow Jones Industrial Average fell 0.2%
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The MSCI Asia Pacific Index fell 0.2%
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The MSCI Emerging Markets Index fell 0.5%
Currencies
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The Bloomberg Dollar Spot Index rose 0.2%
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The euro fell 0.2% to $1.0888
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The Japanese yen was little changed at 128.62 per dollar
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The offshore yuan fell 0.2% to 6.7495 per dollar
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The British pound fell 0.3% to $1.2189
Cryptocurrencies
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Bitcoin fell 0.4% to $23,374.8
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Ether fell 0.2% to $1,633.82
Bonds
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The yield on 10-year Treasuries declined one basis point to 3.38%
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Germany’s 10-year yield advanced two basis points to 2.10%
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Britain’s 10-year yield advanced two basis points to 3.03%
Commodities
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Jason Scott and Stephen Kirkland.
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