U.S. stock futures were generally down slightly on Thursday after the Dow Jones industry average closed a record high.
Dow-related futures contracts jumped between slight gains and losses. S&P 500 futures lost 0.3%. Futures on the Nasdaq 100 have thrown about 1% as technology inventories are under pressure again. Shares of Tesla and Facebook fell in pre-sale.
The move comes after Dow jumped 425 points on Wednesday to close at a record high temperature in a volatile session that at one point recorded an average decline of 30 stocks by more than 110 points. The S&P 500 advanced 1.1%, while the Nasdaq Composite gained 1%. Earlier in the session, the technological weight index fell 1.3%.
Rising rates were measured by stocks at the beginning of the session as American ten-year treasury the yield reached 1.4% and reached its highest level since February 2020. Higher rates could encourage investors to turn away from stocks and switch to bonds. Higher rates could particularly hit the growth-oriented technology sector.
The ten-year yield on Thursday morning reached 1.46%.
“Our underlying case is that rates will continue to rise due to growing growth and expectations of inflation and, ultimately, the normalization of the Federal Reserve,” said Ryan Detrick, chief market strategist at LPL Financial. “We also believe that rates will move too fast, the Fed will intervene to ensure that rising rates don’t become too restrictive and disrupt stock markets or the real economy,” he said.
Yields peaked after the Federal Reserve presidency Jerome Powell continued to reduce the threat of inflation.
“It seems pretty clear to us that the shift in rates is driven by growing optimism about economic growth, and rates are finally‘ catching up ’with the bullish outlook for stock growth,” said David Lefkowitz, head of U.S. stocks at UBS Global Wealth Management. “So capital owners shouldn’t be overly concerned.”
As for the data, the initial numbers of unemployment claims will be released at 8:30 a.m. beginning Thursday, while economists polled by Dow Jones will expect a footprint of 845,000. Also at 8:30 a.m., the U.S. Department of Commerce will release its second estimate of GDP in the fourth quarter.
It will also be a busy day in terms of earnings with numerous companies that will publish quarterly results. Best Buy, Papa John’s and Domino’s Pizza are among the names on deck before the bell opens. After the market closed, the names reporting were Salesforce.com, Beyond Meat, Etsy and Caesars Entertainment.
New public companies Airbnb and DoorDash should also report earnings after the final bell on Thursday.
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