US stock futures fall as GameStop builds Frenzy

Shares of GameStop were up more than 100% premarket, after closing 44% on Thursday. AMC Entertainment was nearly 60% higher than the opening bell.

Robinhood Markets, a popular location for online traders, said late Thursday that it would restore some of the stock trading it had previously curbed. American Airlines climbed almost 10% premarket.

“The GameStop story, in which you have private investors who are a new player in the market, [is] one that people cannot ignore, ”said Luc Filip, Head of Private Banking Investments at SYZ Private Banking. “There are some crucial links for hedge funds short of those stocks.” Those investors sell other long positions to close money-losing short positions, which generally puts pressure on the markets.

Stock markets faltered in January, ravaged by headlines over the supply of coronavirus vaccines and tightened lockdown measures around the world. The Cboe Volatility Index, a measure of stress in markets, rose 14% on Friday and is up more than 50% in January.

Earnings season continued, with oil company Chevron and construction equipment giant Caterpillar slated to report ahead of the opening bubble. Pharmaceutical company Eli Lilly and aerospace company Honeywell will also make early morning profits.

Skyworks solutions,

a chip maker that Apple supplies,

rose nearly 13% in premarket trading after reporting gains after hours on Thursday that exceeded analyst estimates. The board of directors also approved a $ 2 billion share buyback.

Megacap technology companies slipped ahead of the opening bubble. Apple was down 1.2%, Microsoft was down 2.1% and Google’s parent company Alphabet was down 1.8%.

“Those hedge funds that have been affected have no choice but to get rid of some of their favorite holdings to raise that money,” said Seema Shah, chief strategist at Principal Global Investors, adding that she would see further declines as a buying opportunity for technical shares.

Abroad, the pan-continental Stoxx Europe 600 fell 1.2%. The relatively slow roll-out of vaccines across the European Union and recent delays in delivery are causing concerns about prolonged lockdowns and pressures on the markets, investors said.

Swedish telecom Ericsson jumped 7.7% after posting profit higher than estimates and said it had gained market share. Meanwhile, Nokia‘s

stocks listed in Finland were up by almost 5%. US-listed shares of the mobile phone company have been among the stocks ravaged by private investors in recent days.

Most of the major benchmarks have fallen in Asia. The Shanghai Composite Index fell 0.6% and the Japanese Nikkei 225 fell 1.9%. South Korea’s Kospi index fell 3%, the largest daily drop in five months.

In bond markets, the benchmark yield on 10-year US Treasuries rose to 1.071%, from 1.055% on Thursday. The dollar strengthened, with the WSJ Dollar Index rising 0.1% to its highest level in more than five weeks.

The U.S. Bureau of Economic Analysis will release the latest consumer spending data at 8:30 a.m. ET. Economists expect it to drop for the second straight month in December due to an increase in virus cases, indicating a loss of momentum in the economy towards the end of the year.

“We expect more caution from US consumers in the near term,” said Gero Jung, chief economist at Mirabaud Asset Management, saying this would impact the economic recovery as consumer spending makes up two-thirds of US gross domestic product.

Write to Anna Hirtenstein at [email protected]