Traders on the trading floor of the New York Stock Exchange
Source: NYSE
Futures contracts linked to major US stock indices moved up incrementally At the start of the overnight session Wednesday evening after pressure on technology stocks, the Nasdaq Composite sent down 2% during the regular session.
Dow futures were up 30 points, while contracts pegged to the S&P 500 were up less than 0.1%. Futures pegged to the Nasdaq 100 also traded just above the flatline.
The overnight moves came after a burst of late selling in high growth and technology stocks during the regular session.
The S&P 500 was down 0.6% after rising a whopping 0.8% during the day, while the tech-heavy Nasdaq dropped 2% to close during its session low. Apple, Facebook and Netflix all slid more than 2%, while Tesla was down 4.8%.
The Dow Jones Industrial Average, which had outperformed its competitors in positive territory for most of the day, plunged into the red in the closing seconds of the session. The Dow’s industrials had jumped more than 300 points during their session high.
The Dow’s weakness came when the reopening of deals such as airlines and cruise lines reversed its previous strength. Norwegian Cruise Line was down 4.9%, while Royal Caribbean and Carnival were down 1.9% and 2.8% respectively. Delta and United Airlines also ended the day lower.
The pressure on equities came even as bond yields continued to decline from recent highs. Yields on 10-year Treasury bonds fell 3 basis points to 1.61% on Wednesday, falling for the third day after yields hit a 14-month high last week.
Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell appeared for a second day of virtual testimony before federal lawmakers. Both reiterated their belief that the US economy will show significant growth in 2021, largely thanks to fiscal and monetary stimulus measures.
“Most likely, there will be a very, very strong year,” Powell said. “There are risks up and down, of course, but it should be a very strong year from a growth standpoint … In the longer term, we need to generate income to support the ongoing expenses that we want to make.”
Powell and Yellen said on Tuesday that asset valuations appear high in certain areas of the market, but that the financial sector is healthy and equipped to deal with any market turbulence once stimulus measures begin to ease.