Stocks Drop Ahead of Crucial Tech Earnings: Markets Wrap

Tech results are coming at a critical moment for Wall Street as the S&P 500 heads toward its worst week since April. A wild week for stocks is ending on a cautious note, with results from tech giants set to arrive at a crucial time.

Most major industries fell on Friday, with the S&P 500 poised for its worst week since April amid a “rotation” that saw investors trimming positions on this year’s winners in favor of laggards. Underpinning that trade were bets the 2024 rally would broaden out of megacaps as the Federal Reserve cuts rates. The swift repositioning spurred calls for a pullback that engulfed other sectors outside of tech just ahead of the industry’s earnings. Earlier Friday, computer systems at businesses and public services were disrupted after a botched update of a widely used cybersecurity program took down Microsoft Corp. systems. CrowdStrike Holdings Inc. Chief Executive Officer George Kurtz posted on X that the fault had been identified and “a fix has been deployed,” adding that it wasn’t a cyberattack.

The S&P 500 hovered around 5,530. Megacaps were mixed, with Microsoft down and Apple Inc. up. A $12 billion exchange-traded fund tracking small caps (IWN) edged mildly lower after tumbling almost 2% in the previous session. CrowdStrike sank as much as 15% before paring losses. American Express Co. slipped after warning of higher marketing spending amid a slowdown in billings growth.

Treasury 10-year yields advanced three basis points to 4.23%. The dollar fluctuated.

Corporate Highlights:

• Netflix Inc.(NFLX) extended its lead over the streaming competition, adding 8.05 million customers in the second quarter and raising estimates for annual sales and profit margins.
• SLB and Halliburton Co. reported strong international demand for crude drilling after posting earnings that met or beat forecasts, supporting their shift into overseas markets.
• SunPower Corp.(SPWR) plunged as Guggenheim Securities cut the solar equipment firm’s price target to zero and said the stock may soon be delisted.
• Eli Lilly & Co.’s (LLY) Mounjaro gained Chinese regulatory approval for weight loss less than a month after a similar therapy from Novo Nordisk A/S, fueling competition in a nation that’s among the world’s most severely hit by obesity.
• Hawaiian Electric Industries Inc.(HE) is among the companies that have tentatively agreed to pay more than $4 billion to resolve hundreds of lawsuits over the wildfires that ripped through Maui last year, according to people familiar with the deal.
• Reliance Industries Ltd., (RELIANCE.NS) helmed by billionaire Mukesh Ambani, reported a profit that missed analyst expectations as it grappled with low margins in a “challenging operating environment” for its energy businesses.