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(Reuters) – Futures tracking the Nasdaq index pointed to a more than 1% drop at the open on Tuesday as investors sold off high-flying technology stocks on valuation concerns ahead of Federal Reserve Chairman Jerome Powell’s testimony in Congress.
Powell is expected to reassure investors that the central bank will tolerate a faster pace of price increases despite concerns over a potential pick-up in inflation and a rise in bond yields.
The hearing before the Senate Banking Committee is scheduled to begin at 10 a.m. EST (1500 GMT) and will be Powell’s first since Democrats won the White House and control of both chambers of Congress.
The Nasdaq and the benchmark S&P 500 posted their biggest one-day percentage declines in February on Monday as inflation fears and overheating in asset markets hit the so called “stay-at-home” winner stocks that had led the Wall Street rally from the pandemic lows.
Early trading pointed to another round of losses for technology-related stocks, with shares of Netflix Inc (NASDAQ:NFLX), Facebook Inc (NASDAQ:FB), Alphabet (NASDAQ:GOOGL) Inc, Microsoft Corp (NASDAQ:MSFT), Amazon.com Inc (NASDAQ:AMZN) and Apple Inc (NASDAQ:AAPL) falling between 1.1% and 2%.
Value stocks, which are poised to benefit from an economic rebound, have outperformed growth shares in February.
At 7:16 a.m. ET, Dow e-minis were up 13 points, or 0.04%, S&P 500 e-minis were down 14 points, or 0.36%, and Nasdaq 100 e-minis were down 177.25 points, or 1.34%.
Occidental Petroleum Corp (NYSE:OXY) slipped 1.9% after the oil producer posted a larger-than-expected fourth-quarter loss.
Home Depot Inc (NYSE:HD) fell 2.5% after the home improvement retailer warned that it was unable to predict how consumer spending would evolve this year.
Cryptocurrency miners Riot Blockchain (NASDAQ:RIOT) Inc and Marathon Patent Group Inc slumped 15% and 17%, respectively, while Bitcoin bank Silvergate Capital (NYSE:SI) Corp slid 9.5% as Bitcoin dropped nearly 17% to $45,000. Tesla (NASDAQ:TSLA) Inc, which had invested $1.5 billion in the cryptocurrency, also tumbled 4.5% and was set to plunge into the red for the year.
U.S. consumer confidence data is due at 10 a.m ET, the reading of which is expected to hit 90 in February.
