Dow Jones: Stock Market Dips 400 Points on Earnings Misses and Triple-Witch Risk

Dow Down 400 Points as FedEx, Nike Warnings Hit Confidence Before Options Expiry

U.S. stocks opened sharply lower Friday, with the Dow falling around 400 points, or 1%, pressured by weak corporate guidance and renewed tariff concerns. The S&P 500 dropped 0.7% and the Nasdaq slipped 0.6%, setting the S&P on course for a fifth straight weekly decline. The broader market remains cautious ahead of a major options expiration and potential trade policy headlines.

What’s Driving Early Losses?

FedEx and Nike both issued cautious outlooks that rattled confidence across sectors. FedEx cut its full-year profit forecast for the third consecutive quarter, citing sustained softness in the U.S. industrial economy. Shares plunged over 11%, raising fresh concerns about freight demand and broader economic momentum.

Nike also warned of a mid-teens percentage drop in Q4 sales, worse than expected, despite beating earnings estimates. The stock fell more than 8% pre-market, dragging consumer peers including Foot Locker and Under Armour lower as investors priced in weaker discretionary demand and tariff impact.

Micron Reverses Despite AI Optimism

Micron initially rallied on strong AI-related results, but the stock reversed sharply and is now down more than 7% in early trading. The company posted Q2 revenue of $8.05 billion, up 38% year over year, and guided Q3 above consensus. However, profit-taking and sector rotation outweighed optimism around its high-bandwidth memory sales, which exceeded $1 billion for the quarter and are fully booked through next year. The selloff is weighing on semiconductor stocks more broadly, limiting tech’s ability to support the indexes.

Why Is the Triple-Witching Expiration in Focus?

Roughly $4.7 trillion in equity options and futures contracts are set to expire today in a quarterly triple-witching event, making this one of the largest expirations since December. While these events can drive sharp moves, some analysts believe today’s expiration could pass with limited disruption, thanks to reduced hedging pressure.

Earlier this month, bearish positioning widened the put-call skew to multi-year highs, but recent equity stability has left many contracts out-of-the-money. This has eased short gamma exposure and helped drive the VIX down from near 30 to around 20.

What’s the Near-Term Outlook?

With triple-witching yet to play out, volatility remains a real risk into the afternoon session. Tariff-related uncertainty and fragile earnings sentiment are keeping traders on edge. Focus now turns to next week’s durable goods orders and consumer sentiment data for direction. While the Fed’s dovish stance offered some relief midweek, today’s price action suggests broader caution remains firmly in place.

More Information in our Economic Calendar.