Stock futures held steady in overnight trading on Thursday after another sell-off on Wall Street led by major technology names.
Futures on the Dow Jones Industrial Average rose about 20 points. The S&P 500 futures and the Nasdaq 100 futures were both flat.
During Thursday’s regular trading session, the S&P 500 declined 0.8% for its biggest drop in a week. The Dow dipped 130 points, snapping a four-day winning streak. The tech-heavy Nasdaq Composite fell 1.3% and briefly dipped back into correction territory, down 10% from its record high.
“Tech inflicted a lot of the damage as that group extends the sell-off that commenced back on Sept.3,” Vital Knowledge founder Adam Crisafulli said in a note on Thursday. “The summer excess is still being wrung out of tech and the process has a bit more to run.”
Some of the biggest technology stocks have suffered double-digit losses so far this month as investors rotated out of high-flying market leaders. Amazon, Microsoft, Facebook and Apple have all lost at least 10% this month.
Investors also remained on edge about the outlook on further coronavirus stimulus as well as the timing of a viable vaccine.
Republicans and Democrats are still struggling to agree on how much aid to continue to provide in a follow-up bill to the previous $2 trillion package. President Donald Trump said Wednesday he liked “the larger numbers,” urging GOP lawmakers to go for a bigger coronavirus stimulus, but his comments left Republicans skeptical.
Meanwhile, the path to a Covid-19 vaccine, which is critical to the economic recovery, still seems unclear. Health officials said vaccinations would be in limited quantities this year and not widely distributed for six to nine months.
“A safe and transparent vaccination process is critical to encouraging widespread inoculations once effective vaccines are identified and tested.” Mark Haefele, UBS Global Wealth Management’s chief investment officer, said in a note. “In our central scenario, we expect widespread vaccine availability by 2Q21.”
On Thursday, the Federal Reserve, which just began a second round of Wall Street stress tests, said it’s weighing whether to continue capping U.S. banks’ dividend payments and share buybacks.
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