Key Highlights

● S&P 500 futures fell 1.13% to 7,666.25 while Dow futures edged up 0.02%.

● Cap-weighted S&P 500 is hit harder by megacap tech selling than the price-weighted Dow.

● Exxon Mobil and Chevron rose after Earnings beats, with oil above $104 a barrel.

● The Dow gained about 2.8% in October through Thursday, versus 0.9% for the S&P 500.

S&P 500 futures were at 7,666.25 at roughly 8:03 a.m. ET Friday, down 88 points or 1.13%, in a market quote snapshot. Dow futures were at 52,521 in the same snapshot, up 9 points, or 0.02%. Nasdaq-100 futures were down 2.62%.

A one-point gap between the S&P 500 and the Dow is unusual for a pre-market session, and it comes down to what each index holds. The S&P 500 is weighted by market value, so a handful of megacap technology companies drive a large share of its daily move. The Dow is a price-weighted basket of 30 stocks with a different mix.

Friday's selling is concentrated in exactly the stocks that dominate the S&P 500. Amazon (NASDAQ:AMZN) was down about 7% before the bell after reporting trailing 12-month free Cash Flow outflows of more than $42 billion and 2026 Capital spending of about $220 billion, per market coverage. Intel (NASDAQ:INTC) was down about 25% after media reports of fourth-quarter Revenue guidance of $15 billion to $16 billion, well short of the $17.07 billion consensus.

Media reports said Nvidia (NASDAQ:NVDA), AMD (NASDAQ:AMD), Broadcom (NASDAQ:AVGO), Qualcomm (NASDAQ:QCOM) and Micron (NASDAQ:MU) were down between 2% and 9%. Alphabet (NASDAQ:GOOGL), which fell 12.6% on Thursday, is another heavyweight still under pressure. When several of the index's largest members fall together, the whole benchmark follows even if most of its other components are steady.

Why the Dow is holding up

The Dow has a different set of drivers this morning. Exxon Mobil (NYSE:XOM) was up 2.09% and Chevron (NYSE:CVX) up 1.70% in premarket trading at 7:41 a.m. ET after both beat expectations, one financial news site reported. Chevron is a Dow component. Oil above $104 a barrel is also lifting energy names broadly.

Thursday's session previewed the split. One market-data report noted that 23 of the Dow's 30 members rose even though the index closed down 0.25%, while health care gained 2.4% and communication services fell 1.9%. Defensive sectors such as health care, consumer staples and utilities carry relatively more weight in the Dow than tech does in the S&P 500.

Amazon is also a Dow member, so the Dow is not immune. But its price weighting means a 7% drop in one stock moves the index far less than the same move does in the cap-weighted S&P 500.

Friday is the last trading day of October, which raises the stakes. Based on closing levels, the S&P 500 was up about 0.9% for the month through Thursday, at 7,720.39. A 1.1% decline at the open would roughly erase that gain. Media reports described the index as up about 1% for October and over 12% for the year heading into Friday.

The Dow, by contrast, was up about 2.8% for the month through Thursday. A flat finish would leave it comfortably ahead of the S&P 500 for October.

Futures can move a lot between 8 a.m. and the 9:30 a.m. ET open, and the split may narrow. Earnings outside tech have been strong. Market data as of Oct. 23 showed 83% of reporting S&P 500 companies beating earnings estimates, above the five-year average of 78%. That supports the rotation view, in which money is moving within the market rather than leaving it.

What to watch

The opening print for Amazon, Intel and the chip group will decide how much of the S&P 500 drop holds. At 9:45 a.m. ET the Chicago PMI, forecast at 54.6 versus 58.8 prior, is the next data point. Fed speakers Mary Daly and Alberto Musalem follow around midday. Apple (NASDAQ:AAPL) reports Monday after the close, and the midterm elections are on Tuesday.