Nasdaq 100 futures fall after Netflix’s earnings disappoint

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US stock index futures were mixed in early morning trading on Friday after a disappointing earnings report from Netflix, which built on falls in key moving averages during regular trading.

Futures contracts linked to the Dow Jones Industrial Average rose 66 points, or 0.14%. S&P 500 futures were roughly flat, while Nasdaq 100 futures were down 0.47%.

Shares of Netflix plunged 19% during extended trading on Thursday after the company’s fourth-quarter earnings report showed a slowdown in subscriber growth. Peloton tumbled 23.9% during regular trading after CNBC reported that the company was temporarily halting production of its fitness products.

During regular trading, the Dow lost 313 points, or 0.89%. At one point during the session, the 30-stock benchmark was up more than 450 points. A similar reversal played out at the other major averages. The S&P fell 1.1% after rising 1.53% earlier. The Nasdaq Composite ended the day down 1.3%, reversing a previous move that sent the tech-heavy index up 2.1%.

“The market has been sending erroneous signals for the past few weeks and it seems like the broader indices are finally collapsing,” said Scott Redler of T3 Live. The S&P 500 closed below 4,500 on Thursday for the first time since Oct. 18, which Redler says is important from a technical perspective and “opens the door for a targeted move to at least 4,320, which would take the S&P 10% lower.”

Thursday’s slide pushes the Nasdaq Composite further into correction territory — more than 10% below its November high — as rising interest rates weigh on tech stocks as future earnings look less attractive.

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The benchmark 10-year Treasury yield hit 1.87% Thursday ahead of next week’s two-day Federal Reserve meeting.

“While a handful of rate hikes over the next year or two would represent a change in Fed policy, we wouldn’t view the policy as hawkish, and we don’t expect the initial rate hike to derail the economic recovery,” Scott said Wren, senior global market strategist at the Wells Fargo Investment Institute. However, he added that rate hikes would bring volatility to the market.

Both the Dow and S&P 500 are on course for their third consecutive week of losses. The Nasdaq Composite is down almost 5% for the week, putting it on course for its fourth consecutive week of losses and its biggest weekly loss since October 2020. Small caps have also been hit hard and the Russell 2000 is on track for its worst week since June 2020.

Amid the sell-off in technology stocks, some believe there is value in select stocks.

“With the broader Nasdaq in correction territory, we see opportunities in certain areas of the technology sector, such as semiconductors, cloud stocks and mega-cap stocks,” said Robert Schein, chief investment officer at Blanke Schein Wealth Management. But he was quick to note that he doesn’t view the pullback as a “general buy-the-dip moment.”

In terms of earnings, Schlumberger will report earnings before the market opens on Friday.

– CNBC’s Patti Domm contributed to the coverage.