Dow Jones Futures higher following Thursday ‘tech wreck’
We look at where futures markets suggest the Dow Jones benchmark will open at on Friday, 19 March.
Tech stocks fall as treasury yields rise
US tech stocks were hammered on Thursday, 19 March, as treasury yields jumped above 1.7% for the first time in 14-months.
The tech-centric Nasdaq 100 fell 413 points or 3.13% in response, finishing out the session at the 12,789 point level. Large-cap tech saw billions in market value destroyed: Facebook dropped 1.9% Amazon plunged 3.44%, Alphabet (parent of Google) was down 2.62% and Apple slid 3.39%.
Tesla, the poster child of this latest bull market, saw its stock fall close to 7%, finishing out yesterday's session at $653 per share.
Off the back of this week’s post-Fed meeting relief rally, IG Market Analyst Kyle Rodda said:
‘Apparently, though the Fed was sufficiently dovish, the risks of an overheating economy and higher inflation is forcing the market to sell bonds and steepen the yield curve once more. It must be said, there was little reassurance from the Fed yesterday that it would take steps to lean against higher risk-free rates, if necessary.’
‘Perversely, perhaps the Fed’s commitment to accommodative policy, but reticence on controlling yields, has only forced the market to price-in a hotter recovery,’ Mr Rodda finished.
Tech wasn’t the only sector down. By around 4 PM on Thursday, both WTI and Brent were down almost 9%. US-listed energy stocks such as Exxon Mobil and Chevron fell sharply in response.
Mind you, while tech and energy stocks were crushed by an anxious market, bank stocks performed strongly: Wells Fargo rose 2.43%, Goldman Sachs added 0.88%, and Bank of America increased 2.61%.
In describing the catalyst behind these moves, Ord Minnett analysts said: ‘Bank stocks were among the best performers as investors bet that higher interest rates would translate into higher profits.’
Dow Jones futures point to higher open on Friday
At the other end of the spectrum, the Dow Jones spent most of Thursday’s session in positive territory, before trending lower during the last few hours of trade. The Dow finished out the day at 32,862 points, down 153 points or 0.46%.
UnitedHealth, JP Morgan and 3M were the best performing Dow constituents on Thursday, while Chevron, Apple and Intel were the worst performing.
At the time of writing Dow futures were up 64 points or 0.20%, suggesting the key US benchmark would open higher on Friday, March 19.
Elsewhere, S&P 500 futures were up, while Nasdaq futures were down, at the time of writing.
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