By Peter Nurse
Investing.com -- U.S. stocks are seen opening marginally lower Friday, with the tech sector likely to underperform after disappointing quarterly earnings from social media giant Snap (NYSE:SNAP).
At 07:00 AM ET (1100 GMT), the Dow Futures contract dropped just 10 points, or 0.1%, S&P 500 Futures traded 12 points, or 0.3% lower, and Nasdaq 100 Futures dropped 70 points, or 0.5%.
The corporate earnings season is in full flow and companies have generally been beating expectations so far, but they also continue to report rising costs and the possibility of an economic slowdown affecting operations later this year.
Snap was the first of the major tech firms to report second-quarter earnings late Thursday, and it painted a grim picture of the effects of a weakening economy on social media, declining to make a forecast in "incredibly challenging" conditions while stating it will significantly slow hiring.
Social media stocks, like Meta Platforms (NASDAQ:META), Twitter (NYSE:TWTR), and Pinterest (NYSE:PINS), slipped after hours on the back of these disappointing results, as investors fretted that they could be hurt by slowing online ad sales.
This news has spoiled what has generally been a positive week for stocks, the best since June, with the blue-chip Dow Jones Industrial Average on track for a weekly gain of 2.4%, the broad-based S&P 500 for a gain of 3.5%, while the tech-heavy Nasdaq Composite is on course to end the week 5.3% higher.
The earnings deluge continues Friday, with the likes of American Express (NYSE:AXP), Verizon (NYSE:VZ), and Twitter all slated to report before the bell.
The U.S. economic data slate includes manufacturing and services PMI data, which are expected to slow a small weakening in business confidence.
The equivalent numbers in the Eurozone showed that business activity slumped into contraction territory in July, dragged lower by a quickening slowdown in manufacturing and near-stagnant growth in services.
S&P Global said its flash composite purchasing managers' index dropped to a 17-month low of 49.4, the first reading that has come in below the 50 mark - which indicates contraction - since February 2021.
Oil prices fell Friday, continuing the recent selling on the back of weakened demand in the United States, the world’s largest consumer of crude.
Data released earlier this week showed that U.S. gasoline demand had dropped nearly 8% from a year earlier in the midst of the peak summer driving season.
The number of U.S. oil rigs collated by Baker Hughes, and the CFTC positioning data are due later in the session, as usual.
By 07:00 AM ET, U.S. crude futures traded 1.3% lower at $95.14 a barrel, while the Brent contract fell 1% to $102.84.
Additionally, gold futures traded 0.5% higher at $1,722.25/oz, while EUR/USD traded 0.6% lower at 1.0170.