Stock futures rise on tech selloff

U.S. stock indexes

Futures contracts tied to the major U.S. stock indexes rose in the overnight session Wednesday evening as investors continued to pull back from the technology stocks sending the Nasdaq Composite down 2% during the regular session.

Futures contracts tied to the Dow Jones Industrial Average rose 80 points, while contracts tied to the S&P 500 rose 0.2%. Futures tied to the tech-heavy Nasdaq 100 climbed by a similar amount.

The market suffered an ugly close where the losses among technology stocks widened, pulling down the major averages in a rapid fashion just before the closing bell.  

The S&P 500 fell 0.6% after rising as much as 0.8% during the day, while the tech-heavy Nasdaq dropped 2% to close at its session low. Apple, Facebook and Netflix all slid more than 2%, while Tesla fell 4.8%. 

The Dow Jones Industrial Average, which had outpaced its peers in positive territory for most of the day, dipped into the red in the final seconds of the session. The Dow industrials had jumped more than 300 points at its session high.

Shares of cruise operators fell to session lows after the Centers for Disease Control and Prevention said the conditional sailing order limiting cruises will stay in place until November 1. Norwegian Cruise Line dropped 4.9%, while Royal Caribbean and Carnival fell 1.9% and 2.8%, respectively. 

Pressure on equities came even as bond yields continued to decline from recent highs. The 10-year Treasury yield dipped 3 basis points to 1.61% Wednesday, falling for a third day after the rate hit a 14-month high last week.

Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell said on Tuesday that valuations in some markets had risen, but that they were not yet causing alarm. Both told the House Financial Services Committee they are confident in the stability of the financial sector as the US economy recovers from the outbreak.

Damon Harrison
Market Analyst, IPG Group