U.S. stock futures tumbled on Wednesday, with notable pressure ahead for the technology sector and rising bond yields in focus, while investors also waited for private-sector payrolls data.
How are stock-index futures trading?
- Dow Jones Industrial Average futures YM00,
-1.03% fell over 300 points, or 1%, to 33,833 - S&P 500 futures ES00,
-1.20% dropped 1.2% to 4,280 - Nasdaq-100 futures NQ00,
-1.36% dropped 1.4% to 14,444
On Tuesday, the Dow Jones Industrial Average DJIA,
What’s driving the market?
Rising bond yields were set to derail chances of any follow-up to Tuesday’s gains. Some investors were seeking haven in the U.S. dollar DXY,
The combined effect of rising yields and a global energy crunch that seems to be approaching the U.S. is triggering “more negative sentiment,” said Saxo Bank’s chief investment officer, Steen Jakobsen, in a note to clients.
“Yesterday’s session failed to take out the previous day’s high, so if the energy crunch narrative builds today with yields extending their rise, then we could see a renewed selloff,” said Jakobsen.
U.S. natural-gas futures NGX21,
Technology stocks looked set to lead any selloff, as rising yields can be a negative for shares of fast-growing companies as they make those future cash flows appear less valuable.
Read: Analyst forecasts tech stock rebound of at least 10% and says rate fears will soon pass
Economic data will swing into focus for investors, with the ADP employment report for September due at 8:15 a.m. Eastern Time. “The next big announcement on the radar is the U.S. jobs report on Friday — a weak number could prompt concern that we are heading for the dreaded stagflation scenario,” said AJ Bell investment director Russ Mould, in a note to clients.
What companies are in focus?
- Shares of Palantir Technologies Inc. PLTR,
+0.17% jumped 10% in premarket trading, after the data-software company said it won an Army contract worth $823 million.
How are other assets trading?
- Oil futures fell, with the U.S. benchmark CL00,
-0.20% down 0.5% to $78.52 a barrel. Gold futures GC00,-0.67% dropped 0.8% to $1,747.60 an ounce. - In Europe, the Stoxx Europe 600 SXXP,
-1.85% fell 1.8%, while London’s FTSE 100 UKX,-1.70% dropped 1.5%. - The Hang Seng Index HSI,
-0.57% closed down 0.5% in Hong Kong, while Japan’s Nikkei 225 NIK,-1.05% dropped 1%. Markets in China remain closed for a holiday.
