Equity futures traded overnight on Thursday following a tech route on Wall Street amid a rise in returns.
Futures on the Dow Jones industrial average fell 200 points, while S&P 500 futures slipped 0.8%. The Nasdaq 100 futures contract fell by 1%.
All eyes will be on the February work report, which will be issued on Friday morning. Economists expect to add 210,000 payrolls in February, compared to just 49,000 in January, according to Dow Jones.
The shift in futures contracts follows a sharp sell-off caused by Federal Reserve Chairman Jerome Powell over the rising effects. He said the recent run-up had caught his attention, but that he had given no indication of how the central bank would help it. Some investors expected the Fed chairman to indicate his willingness to adjust the Fed’s asset buying program.
The economic reopening could create upward pressure on prices, ‘Powell said in a Wall Street Journal webinar on Thursday. Even if the economy ‘sees short-term increases in inflation … I expect us to be patient’, he added.
“The translation of ‘patient’ in the market is that patient does not mean ‘never’, and that Powell indicates that easy money will come to an end at some point,” said Mike Loewengart, managing director of investment strategy at “Although the words are not too far from the Fed’s previous position, they are enough to move a turbulent market south.”
The ten-year treasury yield bounced back above 1.5% following Powell’s comments. The benchmark rate stabilized earlier this week after rising 1.6% last week amid higher inflation expectations.
Technical equities have led to a decline in the market as growth-oriented businesses tend to be more vulnerable to higher interest rates. The Nasdaq Composite fell 2.1% on Thursday, bringing its losses to 3.6% this week. The technology-heavy benchmark also turned negative for the year and fell to the right on an intraday basis, or by 10% lower than a recent high.
The S&P 500 and the Dow both fell more than 1% on Thursday, on a losing week. Energy performed better in the previous session than a 2.5% increase amid a rising oil price.
“Rates have risen again, opening the door for more technology stock sales,” said Ryan Detrick, chief market strategist at LPL Financial. “The bright side is that the economy is still improving and that leadership of financial operations is something that indicates that this is not a moment to sell everything.”