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Stock-index futures were mostly lower Friday, with tech-related shares set to lead the slide as bond yields continue to rise, a day after the Dow Jones Industrial Average and S&P 500 closed at records.
What are major benchmarks doing?
- Futures on the Dow Jones Industrial Average YM00, +0.18% rose 63 points, or 0.2%, to 32,431.
- S&P 500 futures ES00, -0.32% were down 9.30 points, or 0.2%, at 3,918.
- Nasdaq-100 futures NQ00, -1.46% dropped 151.75 points, or 1.2%, to 12,887.25.
The Dow DJIA, +0.58% on Thursday rose 188.57 points, or 0.6%, to close at 32,485.59, building on the previous session’s record close, while the S&P 500 SPX, +1.04% logged its first record finish since Feb. 12, rising 1% to 3,939.34. The Nasdaq Composite COMP, +2.52% jumped 2.5%.
What’s driving the market?
A rebound by tech-related shares led stocks higher Thursday, but a renewed rise in Treasury yields early Friday, with the rate on the 10-year note TMUBMUSD10Y, 1.600% jumping more than 8 basis points to trade above 1.61%, was set to send growth-oriented stocks back to the downside in the final session of the week.
Need to Know: Here’s how far the Nasdaq could fall if bond yields reach 2%
It has been a volatile week for equities, including the Nasdaq, which has seen gains or losses of more than 2% in three sessions.
“We believe the recent equity volatility is likely to continue as investors seek to balance increasing optimism over growth with worries about higher inflation,” said Mark Haefele, chief investment officer at UBS Global Wealth Management, in a note.
“But while we expect conditions to remain volatile, the most recent developments on three of the main market drivers — stimulus, pandemic news, and inflation data — point to further equity upside,” he said.
President Joe Biden on Thursday signed a $1.9 trillion COVID-19 relief package into law. In a televised speech Thursday night, Biden pledged to make all adults eligible for vaccines by May 1.
The combination of aggressive fiscal spending and progress on vaccine rollouts are seen spurring economic growth but also potentially stoking inflation, at least in the short term.
Analysts said technology shares may also be vulnerable to pressure after China’s market regulator on Friday said it had imposed fines on some of the country’s largest tech firms.
Also, Bloomberg reported that the Biden administration had informed some suppliers of China’s Huawei Technologies Co. that it would impose tighter conditions on previously approved export licenses, barring items for use in or with 5G devices.
Meanwhile, a U.S. inflation at the wholesale level for February, the producer-price index came in with a 0.5% rise, as expected. Excluding volatile food and energy prices rose 0.2% for the month, compared against expectations for a rise of 0.3%, according to Econoday. On an annualized basis, the core PPI index was up 2.2% over past year vs 2% in prior month.
The University of Michigan’s preliminary consumer sentiment index for March is due at 10 a.m. Eastern. It’s expected to rise to 78.9 from a February reading of 76.8.
Which companies are in focus?
- Shares of Ulta Beauty Inc. ULTA, +1.27% fell more than 8% in premarket trade after it reported lower fourth-quarter sales and profit year over year late Thursday. It also announced that Chief Executive Mary Dillon will be replaced by company President David Kimbell.
- GoodRx Holdings Inc. GDRX, +7.31% shares fell 4.8% after the healthcare company reported adjusted earnings that were above Wall Street expectations but guided for lower first-quarter sales.
- DocuSign DOCU, +5.90% were under pressure in premarket trade even after the electronic authentication company issued a better-than-expected quarterly outlook in its most recent quarterly report.
- Novavax NVAX, +8.77% says its COVID vaccine is effective against variants of the deadly virus.
- Shares of GameStop Corp. GME, -1.89% rallied 3.9% in premarket trading Friday, following a 1.9% drop in the previous session, on an otherwise mixed morning for other meme stocks.
- Boeing Co. BA, +2.71% has received an order from a private investment firm 777 Partners to buy 24 737 MAX airplanes with an option to purchase a further 60, according to a Reuters report.
How are other assets faring?
- The ICE U.S. Dollar Index DXY, a measure of the currency against a basket of six major rivals, rose 0.5%.
- Oil futures traded slightly lower, with the U.S. benchmark CL.1 slipping less than 01% to $65.97 per barrel. Gold futures GC00 was tumbling $18.70, or 1.1%, to trade at $1,703.90 an ounce, on Comex.
- The pan-European Stoxx 600 Europe index SXXP traded 0.4% lower and London’s FTSE 100 UKX was barely in positive territory, up less than 0.1%.
- In Asia, Hong Kong’s Hang Seng Index HSI skidded down 2.2%, the Shanghai Composite Index SHCOMP, rose 0.5%, China’s CSI 300 000300, +0.35% rose by 0.4%, while Japan’s Nikkei 225 index NIK rose1.7%.
- Bitcoin prices BTCUSD, -3.49% were off 4% at $55,506 trading on CoinDesk.
