Nasdaq futures fall as rate-hike expectations hit tech stocks, while investors look towards job data
Nasdaqfutures slipped Wednesday as investors looked set to sell tech stocksfor a second day.
- Rising bond yields weighed on technology companies Tuesday, with traders pivoting towards financials and energy.
Futures for the
But bond yields rose Tuesday for the second day as investors digested the Federal Reserve's plans to raise
"Rising Treasury yields in the US prompted a bout of rotation from high-growth stocks, such as technology, into value, boosting financial and industrial shares," said Richard Hunter, head of markets at Interactive Investor.
Bond yields, which move inversely to prices, cooled slightly Wednesday. The yield on the 10-year US Treasury note slipped 2 basis points to 1.642%, although this was still well above the 1.48% level seen a month earlier.
European stocks edged higher, with the continent-wide Stoxx 600 up 0.18% and London's FTSE 100 0.22% higher. Asian stocks moved broadly lower overnight, with Hong Kong's Hang Seng index down 1.64% but Tokyo's Nikkei 225 up 0.1%.
Tech stocks zoomed ahead for much of the coronavirus pandemic after central banks slashed interest rates and snapped up bonds. Investors, flush with cash, rushed to buy companies they thought could keep growing even as the economy wobbled.
But those stocks have stumbled in recent months, as the Fed has lined up plans to raise interest rates in 2021 and inflation has soared. These twin factors have made many tech stocks, which are often unprofitable, or barely make money, lose their appeal.
"Investors continue to rotate and are increasing their exposure towards stocks with positive inflation sensitivity like financials, energy and mining," said Peter Garnry, head of equity strategy at Saxo Bank.
Investors focus' has now turned to Friday's non-farm payroll figures, which will give the latest snapshot of the US labor market. Analysts expect the US economy to have added 424,000 jobs in December, according to Bloomberg data, after an increase of 210,000 in November.
A stronger-than-expected figure is likely to raise expectations that the Fed will start hiking interest rates soon, and could spell further trouble for tech.
- At least 21 people, mostly teens, were found dead in a South Africa bar. None of them had any visible wounds.
- Lay’s, Kurkure and Bingo are taking over Indian snacks like Aloo Bhujia, Murukku
- More than $100,000 raised for loyal Burger King employee of 27 years in GoFundMe campaign after video shows him getting 'goody' bag as reward
- Meet Akash Ambani — new chairman of Reliance Jio and owner of Mumbai Indians
- Best apps for Instagram hashtags and captions
- Akash Ambani to head Reliance Jio - that’s just phase I of Mukesh Ambani’s succession plan
- Maha crisis: Thackeray appeals to the rebels to come back
- Tata Motors to increase price of its commercial vehicle segment from July 1