Stock futures rise as pressure on tech stocks eases

Matteo Colombo | DigitalVision | fake images

Futures contracts pegged to major US stock indices rose bit by bit at the start of the Wednesday night session, after pressure on tech stocks caused the Nasdaq Composite to drop 2% during the regular session.

Dow futures rose 30 points, while contracts tied to the S&P 500 rose less than 0.1%. Futures linked to the Nasdaq 100 also traded just above the flat line.

The overnight moves came after a late-day selloff in tech and high-growth stocks during the regular session.

The S&P 500 fell 0.6% after rising 0.8% for the day, while the tech-savvy Nasdaq fell 2% to close at its session low. Apple, Facebook and Netflix fell more than 2%, while Tesla fell 4.8%.

The Dow Jones Industrial Average, which had outperformed its peers in positive territory for most of the day, fell into the red in the closing seconds of the session. Dow industrialists were up more than 300 points at their session high.

The Dow’s afternoon weakness came as the reopening of operations such as airlines and cruise ship operators reversed the previous strength. Norwegian Cruise Line fell 4.9%, while Royal Caribbean and Carnival fell 1.9% and 2.8%, respectively. Delta and United Airlines also ended the day down.

The pressure on stocks came even as bond yields continued to decline from recent highs. The 10-year Treasury yield fell 3 basis points to 1.61% on Wednesday, falling for a third day after the rate hit a 14-month high last week.

Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell appeared for a second day of virtual testimony before federal lawmakers. Both reiterated their belief that, thanks in large part to fiscal and monetary stimulus, the US economy will experience marked growth in 2021.

“It’s going to be a very, very strong year in the most likely case,” Powell said. “Of course there are upside and downside risks, but it should be a very strong year from a growth standpoint … In the long term, we have to increase revenue to support the ongoing spending that we want to do.”

Powell and Yellen said Tuesday that asset valuations appear elevated in certain areas of the market, but that the financial sector is healthy and equipped to deal with any market turmoil once the stimulus begins to fade.


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