Stock Market News Live Updates: Stock Futures Drop as Amazon, Apple Shares Fall After Earnings

Stock futures dipped Friday morning, with investors eyeing a couple of disappointing earnings results from Apple (AAPL) and Amazon (AMZN) that came during an otherwise solid quarterly reporting season from many major companies.

After the blue-chip index established a new closing high on Thursday, contracts on the S&P 500 plummeted. The Nasdaq futures market has underperformed due to a drop in the value of the major technology companies. Treasury yields increased, with the benchmark 10-year yield rising over 3 basis points to 1.6 percent.

Amazon's stock fell after the e-commerce behemoth failed third-quarter earnings estimates and forecasted a rise in expenses in the fourth quarter owing to supply chain interruptions and increased labor, materials, and freight costs. According to Amazon's earnings announcement, these factors are projected to result in "several billion dollars in increased costs" in the current quarter.

Apple, too, disappointed Wall Street in its fiscal first-quarter earnings, with key iPhone sales falling short of estimates despite the launch of its new iPhone 13 smartphone series. Apple's suppliers, such as Taiwan Semiconductor Manufacturing Co. (TSM), Qualcomm (QCOM), and Broadcom (AVGO), all saw their stock drop shortly after the announcement.

The results appeared to validate Wall Street's predictions that escalating supply chain disruptions, labor expenses, and material shortages were affecting businesses of all kinds as the holiday season approached, making it difficult for them to keep up with rising demand.

Furthermore, investors have been concerned that Apple, Amazon, and other technology companies, who were significant participants in last year's lucrative "stay-at-home" trade, would be unable to maintain high growth rates following a pandemic-induced boom in their operations. In the third quarter, Amazon's revenues increased by 15%, a significant decrease from the 27% growth rate in the previous quarter.

"I believe that they are overrated," says the author "On Thursday, Riverfront Investment Group senior market strategist Rebecca Felton spoke with Yahoo Finance Live about technology businesses. "However, keep in mind that valuation is a condition, not a stimulus. And I believe that consistency on both the top and bottom lines will be the impetus for technology."

Meanwhile, investors digested a mixed package of economic data, which included a weaker-than-expected third-quarter gross domestic product figure. While the report was vast in breadth, it only provided a backward-looking assessment of the economy. Some analysts predicted that economic activity would perk up in the closing months of the year, bolstering company performance and stock prices.

On Thursday, Heritage Capital President Paul Schatz told Yahoo Finance, "I still think the best is yet to come." "The third quarter's GDP will be a trough. We'll see considerably better growth in Q4 and Q1 of next year, inflation will peak in the following six months, and supply chain issues will be greatly alleviated by early Q2 of next year. And the majority of ships will be lifted by the rising tide."

"Whatever you want to call it — reopening, reflation, inflation — the economically sensitive trade is very alive, very well, and it's not over," he continued.