Stock futures fell during overnight trading on Wednesday as the market is poised to extend a sharp sell-off amid concerns about increased speculative trading.
Futures on the Dow Jones Industrial Average traded 120 points lower. S&P 500 futures were down 0.7% and Nasdaq 100 futures were down 0.8%.
Apple had its highest-ever sales in fiscal first quarter of fiscal 2021 at $ 111.4 billion. Sales for each product category increased by double percentage points. However, the tech giant’s shares fell 3%.
Tesla fell more than 3% in long-term trading after the electric car maker posted worse-than-expected revenues for the last quarter. The company also said it expects average annual delivery growth of 50% going forward.
Wall Street took heavy losses on Wednesday, with the S&P 500 and the Dow posting their worst day since October as speculative buying frenzy in highly short-short stocks kept investors on their toes. Some fear that under pressure hedge funds could be forced to reduce their stock holdings to raise cash.
“Short bottlenecks causing implosions in some hedge funds join SPACs, IPOs and bitcoin as data points that support a market bubble thesis,” Scott Knapp, chief market strategist at CUNA Mutual Group, said in an email. “This is a time of caution for investors.”
Trading volume exploded in the previous session with 23.7 billion shares switching hands, marking the toughest trading day since at least 2007.
The physical video game store GameStop, a target in the “wallstreetbets” Reddit chatroom, surged an additional 134% Wednesday, pushing its January profits to a whopping 1,744%. AMC Entertainment was up more than 300% on Wednesday alone, experiencing its highest volume ever.
GameStop was down 7% in long-term trading, while AMC Entertainment was down 20%. Other names with high short positions that had rallied this week, including Bed Bath & Beyond and National Beverage, also fell after closing.
Facebook shares remained relatively flat in off-hours trading after the company warned that a turnaround in pandemic trends could hurt its advertising business. The social media company knocked the top and bottom in the fourth quarter.
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