S&P 500 futures showed little movement early Friday, struggling to rebound from a previous session marked by a significant sell-off driven by a sharp increase in oil prices and disappointing earnings from two major technology companies.
The sell-off saw the Dow Jones Industrial Average drop over 500 points, marking its fifth negative day in six. The S&P 500 and Nasdaq Composite experienced their worst one-day performances since late June, falling 1.2% and 2.2%, respectively.
Oil Prices Soar Amid Red Sea Incidents
Futures for Brent crude oil surged past $100 per barrel for the first time since late May, climbing approximately 7% on Thursday. West Texas Intermediate (WTI) futures advanced around 6% after reports of two Saudi oil tankers being struck in the Red Sea. Prices saw a slight increase in early Friday trading in Asia.
Adam Turnquist, chief technical strategist at LPL Financial, noted that the market was poorly positioned for such an upside surprise in oil prices. "When sentiment and positioning are extremely bearish, even a modest deterioration in supply expectations can produce an outsized price response," he stated.
Megacap Earnings Disappoint
Quarterly results from Tesla and Alphabet also contributed to the market pressure. Tesla shares plummeted nearly 15%, its steepest decline since March 2025, following an earnings miss for the second quarter. Alphabet's stock dropped 7% – its largest single-day loss since May 2025 – after it raised its full-year capital expenditure guidance.
These events have placed the major U.S. stock averages on pace for weekly declines. The Dow and S&P 500 have shed 0.8% and 0.7% respectively for the week, while the Nasdaq has underperformed, losing 1.5%.
Asian Markets Mixed, European Futures Indicate Caution
In Asia, Japan's Nikkei 225 fell 2.79%, while the Topix slipped 1%. South Korea's Kospi dropped over 5%, and the Kosdaq declined 4.95%. Australia's S&P/ASX 200 was down 0.95%. Hong Kong's Hang Seng Index fell 1.33%, and mainland China's CSI 300 declined 1.4%.
European stock markets were set for a mixed open. U.K.'s FTSE 100 futures suggested a 0.17% drop, while France's CAC 40 and Germany's DAX were expected to open higher. Stoxx 50 futures hovered just below the flatline.
Treasury Yields Steady, SAP Shares Rise Pre-Market
U.S. Treasury yields were flat in Asia trading after a significant rise in the previous session. The 10-year Treasury yield stood at 4.705%, and the 30-year yield was at 5.175%.
Meanwhile, SAP shares advanced 3% in pre-market trading following a 27% year-over-year surge in its cloud order backlog, reaching 22.9 billion euros in the second quarter. The German software giant reported revenues of 9.88 billion euros, slightly exceeding forecasts.
