US open: Major indices trade lower following tech earnings, PCE data

Wall Street stocks were in the red early on Friday following big tech earnings overnight and some key data points early in the session.

As of 1525 BST, the Dow Jones Industrial Average was down 0.28% at 33,821.74, while the S&P 500 was 0.80% weaker at 4,253.35 and the Nasdaq Composite came out the gate 0.67% softer at 12,784.86.

The Dow opened 94.65 points lower on Friday, taking a bite out of gains recorded in the previous session as corporate earnings continued to stream in and investors digested an unexpected decline in first-quarter gross domestic product.

In the corporate space, Amazon shares slid in early trade after the eCommerce giant posted earnings that failed to meet expectations and issued revenue guidance that fell short of analysts' estimates.

Amazon said on Thursday that first-quarter adjusted earnings per share of $7.38 each, short of the $8.36 expected on the Street, driven by a $7.6bn loss on its Rivian investment after shares in the electric vehicle maker shed more than half their value during the period.

Also in focus, Apple stock traded lower after the iPhone maker warned of a potential $8.0bn hit to its bottom line as a result of supply chain constraints.

No major corporate earnings were slated for release on Friday.

On the macro front, a jump in inflation last month meant that Americans spent less when measured in real terms, although prices rose a tad less quickly than anticipated. According to the Department of Commerce, personal incomes grew at a month-on-month clip of 0.5% in March and expenditures by 1.1%. That was better than gains of 0.4% and 0.6%, respectively, that economists had pencilled-in.

Elsewhere, the broadest measure of inflationary pressures in the US jobs market jumped more than forecast last month as benefits exploded. According to the Department of Labor, in seasonally adjusted terms, the Employment Cost Index increased at a quarter-on-quarter pace of 1.4% (consensus: 1.1%). In annual terms, total compensation in the US grew by 4.5% in March, versus 4.0% one year ago.

Still on data, the Chicago purchasing manager's index decreased to 58.5 points in April, down from 65.9 in March to miss market forecasts of 62, according to the Institute for Supply Management. April's print was the lowest reading since November 2020, pointing towards a slowdown in economic activity.

Finally, the University of Michigan's consumer sentiment index increased to 65.20 points in April, up from 59.40 points in March.