Wall St futures slump after rally as tech stocks slide
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[July 17, 2024] (Reuters)
- U.S. stock index futures slid on Wednesday, with those tracking the
Nasdaq 100 dropping over 1% as investors sold off megacap tech and chip
shares and piled into lagging areas of the market such as small-cap
stocks. Megacaps such as Apple, Microsoft and Alphabet slumped in
premarket trading, dropping between 0.7% and 1.5%.
Shares of semiconductor companies also fell, with AI-chip favorite
Nvidia sliding 3.1% and ASML dropping 6.3% after a report that the Biden
Administration was weighing severe trade restrictions in a crackdown on
Chinese chips.
Elsewhere, U.S.-listed shares of Taiwan Semiconductor Manufacturing were
down 3.5% after Republican presidential candidate Donald Trump said
Taiwan should pay the U.S. for its defense.
However, futures tracking the small-cap Russell 2000 rose 0.2%. The
index has rallied over the past five sessions as investors have shifted
focus away from the banner growth in technology companies to
underperforming areas of the market, on the back of growing bets that
the Federal Reserve is nearing the start of monetary policy easing.
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The Dow Jones Industrial Average and the S&P 500 also hit all-time
closing highs on Tuesday.
Trade Nation senior market analyst David Morrison also cited
profit-taking as a likely cause for Wednesday's dip in futures.
"It could be the rally has been running on fumes recently... what we're
seeing now is a generalized pullback, which is totally consistent with
consolidation and profit-taking after hitting record highs in the major
indices," Morrison said.
Firmer bets on a Fed rate cut in September as well as rising
expectations that former President Donald Trump will be back in the
White House in November after the assassination attempt have helped lift
stocks over the past few sessions.
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Traders work on the floor at the New York Stock Exchange (NYSE) in
New York City, U.S., July 3, 2024. REUTERS/Brendan McDermid/File
Photo
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Investors will focus on comments from Fed officials Thomas Barkin
and Christopher Waller later in the day for clues on how
policymakers have assessed recent inflation, employment and retail
sales data.
Corporate earnings are also in focus, with Johnson & Johnson and
Northern Trust among those scheduled to report before the bell.
On the economic data front, housing starts and industrial production
data for June are also on deck.
At 5:35 a.m. ET, Dow e-minis were down 76 points, or 0.18%, S&P 500
e-minis were down 41.5 points, or 0.73%, and Nasdaq 100 e-minis were
down 255 points, or 1.24%.
Among single movers, trucking firm JB Hunt Transport Services fell
3.0% on reporting a 24% drop in second-quarter profit after markets
closed on Tuesday.
Spirit Airlines slumped 5.7% after the company lowered its
second-quarter revenue outlook, citing lower-than-expected
non-ticket revenue.
(Reporting by Lisa Mattackal in Bengaluru; Editing by Pooja Desai)
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