U.S. index futures slumped on the final trading day of April, dragged lower alongside European and Asian markets, despite stellar economic data and blockbuster earnings as traders took a month-end breather amid a record high for the S&P 500 Index and some earnings disappointments. The dollar pared April losses, and the VIX jumped.
Russell 2000 futures tumbled 1.1% and Nasdaq 100 futures dropped 0.8% after China’s antitrust crackdown weighed on Asian technology shares. Twitter plunged 13% in premarket trading after forecasting second-quarter revenue below some expectations, while Amazon’s blockbuster earnings helped push the stock to all time highs, although gains were trimmed in the premarket.
As Bloomberg notes, confidence in the U.S. economy has surged amid a string of positive data culminating in a report Thursday that showed quarterly growth at an accelerated 6.4%. Given the Federal Reserve’s dovish resolve, that emboldened investors to stay bullish on stocks despite concern about high valuations. Some speculated Fed Chair Jerome Powell will come under pressure later this year to reassess the extent of accommodation.
Meanwhile, earnings continue to be impressive and with just over a half of S&P 500 companies reporting earnings, about 87% beat market expectations, the highest level in recent years. For both the MSCI world index and the S&P500, analysts are expecting earnings in the next 12 months to recover to above pre-pandemic levels.