Dow Jones futures flat following Tuesday’s mammoth tech rally
Dow futures were slightly lower at the time of writing, suggesting the key US benchmark would open lower on Wednesday, 10 March.
US stocks reverse course
On Tuesday we published an article covering the recent sell-off in tech names. We noted that the Nasdaq 100 had fallen ~10% from its recent peak, while Tesla was off a more substantial ~37% from its 52-week high. The stock was also, it should be pointed out, on a six day down streak.
Things reversed sharply on Wednesday: The Nasdaq finished out the session up 3.69% while individual names such as Tesla rose a staggering ~20%. Elsewhere, big-cap tech such as Apple and Facebook gained 4%, Amazon rose 3.7% and Netflix was up 2.6%.
‘After lagging badly for the last few weeks, growth/momentum stocks are exploding higher as investors grow a bit more comfortable around rates and step in to buy this erstwhile most-loved sector,’ Adam Crisafulli, from Vital Knowledge said.
By contrast, the Dow Jones Industrial Average finished up yesterday’s session a paltry 30.30 points or 0.095% – as the staging between old and new economy stocks persists. The S&P 500 was up 1.42% by comparison.
Intel, Apple and Boeing were the best performing Dow constituents on Tuesday; while Walt Disney, American Express and Dow were the worst performing.
Commenting on these market moves, IG’s Market Analyst, Kyle Rodda pointed out:
‘Following several weeks of weakness, as rising bond yields pressured stretched valuations, an overnight drop in risk-free rates, not to mention a sentiment shifting report that China’s “national team” intervened to support its equity markets yesterday, lit a fire under the NASDAQ and the US tech-sector.’
Dow Jones futures at a glance
In the wake of these bullish market moves, US futures markets have traded quietly, with Dow Jones futures trading down 16 points or 0.05% at the time of writing, suggesting that the key US benchmark would open slightly lower on Wednesday.
S&P 500 and Nasdaq futures were also slightly lower at the time of writing.
A not so certain future
Despite that bullish price action, uncertainty continues to hang over equity markets. As Mr Rodda mused:
‘Naturally, given recent trends in global economic data and bond yields, questions were raised amidst the recovery in US tech stocks about whether the move has staying power.’
In the wake of Tuesday’s bullish US session, Australian markets opened higher before dipping soon after, the Hang Seng opened at 29,255 points while the China 50 Index opened at 17,252 points.
In Australia, tech stocks also rebounded, with the All Technology Index up 2.67% or 68 points by 3:00PM.
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