S&P 500 futures fall after a steep sell-off on Wall Street, Apple and Tesla drop after earnings

Stock futures tied to major U.S. equity indices were flat on Thursday following a sharp sell-off the day before.

Futures on the S&P 500 were about unchanged. Dow Jones Industrial Average futures added 29 points, or 0.1%. Nasdaq 100 futures were lower, falling 0.7% amid negative reactions to tech earnings the night before.

Apple turned in its largest revenue on record at $111.4 billion in its fiscal first-quarter earnings report for fiscal 2021. Sales for every product category rose by double-digit percentage points. Shares of the tech giant, however, dipped 2% in premarket trading.

Tesla dropped 5.07% in premarket trading after the electric car maker posted worse-than-expected earnings for the latest quarter. The company also said it expects annual average delivery growth of 50% going forward.

Wall Street suffered steep losses on Wednesday, with the S&P 500 and the Dow posting their worst day since October, as the speculative buying frenzy in heavily shorted stocks kept investors on edge. Some fear that hedge funds being squeezed could be forced to reduce their equity holdings to raise cash.

“Short squeezes causing implosions in some hedge funds are joining SPACs, IPOs, and bitcoin as data points supporting a market bubble thesis,” Scott Knapp, chief market strategist at CUNA Mutual Group, said in an email. “This is a time for caution for investors.”

Trading volume exploded in the previous session with 23.7 billion shares changing hands, marking the heaviest trading day since at least 2007.

Brick-and-mortar video game retailer GameStop, a target on the “wallstreetbets” Reddit chat room, soared another 134% Wednesday, pushing its January gains to a whopping 1,744%. AMC Entertainment surged over 300% Wednesday alone, experiencing its highest volume ever.

GameStop was higher again in premarket trading, reversing earlier losses. AMC Entertainment was flat.

Facebook stock remained relatively flat in after-hours trading after the company warned that a reversal in pandemic trends could hurt its advertising business. The social media company beat on the top and bottom lines for the fourth quarter.

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