Stock futures were flat in overnight trading on Thursday following a tech-led overnight on Wall Street amid a rise in bond yields.
Futures on the Dow Jones Industrial Average rose just 30 points, while the S&P 500 futures were slightly changed. Nasdaq 100 futures fell 0.2%.
All eyes will be on the February jobs report, which will be released on Friday morning. Economists expect that 210,000 parolees were added in February, compared to just 49,000 in January, according to the Dow Jones.
The move in futures was followed by sharp sell-offs by Federal Reserve Chair Jerome Powell’s remarks on bond yields. He said the recent runup has caught his attention but he has not given any indication as to how the central bank will curb it. Some investors expected the Fed’s chair to signal their willingness to adjust to the Fed’s asset purchase program.
Powell said in a Wall Street Journal webinar on Thursday that the economic reopening “puts a slight upward pressure on prices.” “Even if there is a momentary rise in inflation in the economy … I expect us to be patient,” he added.
Mike Lovingart, managing director of investment strategy at e-Marketing, said the market translation of “patient” is “patient” means “never” and that Powell suggests that easy money ends up at a certain stage. Director Mike Lovingart said the trade was financial. “So while Verdage isn’t too far from the Fed’s previous trend, it’s enough to move a poor market south.”
The 10-year Treasury yield rose 1.5% following Powell’s comments. The benchmark rate stabilized earlier this week after rising 1.6% last week amid inflation expectations.
Tech stocks led to market declines as growth-oriented companies are more susceptible to higher interest rates. The Nasdaq Composite fell 2.1% on Thursday, bringing its loss to 3.6% this week. The tech-heavy benchmark also turned negative for the year and fell 10% on an intraday basis, in a revised area or below the recent highs.
Both the S&P 500 and the Dow fell more than 1% on Thursday, heading into a losing week. Energy has been good with a 2.5% increase in the last session amid a spike in oil prices.
Ryan Detrick, chief market strategist at LPL Financial, said rates rose once again, opening the door for more sales of technology stocks. “The bright side is that the economy continues to improve and leadership from the financial and energy spheres is something that suggests that not all of this is for sale.”
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