Adobe's shares experienced a downturn, slipping approximately 3% after the company revealed an outlook for the fiscal second quarter that did not meet investors' expectations. The software giant projected its revenue for the period would range between $4.27 billion and $4.30 billion, aligning closely with the StreetAccount consensus estimate of $4.29 billion. Despite surpassing earnings and revenue expectations in its fourth quarter, Adobe's adjusted earnings are anticipated to range between $4.95 and $5 per share, slightly below analysts' projection of $5 per share.
Notably, American Eagle Outfitters also faced challenges as its shares dropped about 5% following weak guidance from the company. This development further contributed to the unease in the market.
The Dow Jones Industrial Average recorded a decline of 0.2%, marking its third consecutive day of losses. The index is down by 3.4% in the current period, heading towards its worst week since March 2023. The Dow futures lost 187 points, equivalent to a 0.45% decrease, while the Nasdaq Composite managed to gain 1.2% during Wednesday's regular trading session.
However, the Nasdaq 100 futures experienced a decline of 0.95%, shedding 0.1% in subsequent trading. Meanwhile, the S&P 500 and Nasdaq are on track for losses of approximately 3%. Early Thursday, S&P 500 futures ticked lower after the index posted a winning session amid a turbulent week, dropping less than 0.1% shortly after 6 p.m. ET on Wednesday.
The market volatility has sparked discussions among analysts and experts. Dan Niles commented on the situation, stating:
"It's not the tariffs knocking these tech stocks down. It is the fact that revenue estimates were six out of the seven biggest in the Mag Seven all went down for Q1 after reporting Q4."
Michael Green provided insight into market dynamics:
"The really key thing that I would highlight is that rather than an outright sell-off, so far what we've seen is largely rotation."
This sentiment reflects a shift in investor focus rather than panic selling, as traders adjust their portfolios in response to earnings reports and economic indicators.