Stock futures fell on Wednesday overnight as the market is about to spread a strong sell-off amid concerns about rising speculative trading.
Dow Jones Industrial Average futures traded 120 points less. The S&P 500 futures fell 0.7% and the Nasdaq 100 futures fell 0.8%.
Apple earned its highest revenue recorded at $ 111.4 billion in its first-quarter tax profit report for 2021. Sales in each product category increased by double-digit percentage points. However, the shares of the technology giant fell 3%.
Tesla fell more than 3% in expanded trade after the electric car maker posted worse-than-expected gains over the past quarter. The company also said it expects average annual delivery growth of 50% in the future.
Wall Street suffered heavy losses on Wednesday, with the S&P 500 and the Dow posting their worst day since October, as the speculative buying frenzy in very short stocks kept investors on edge. Some fear that hedge funds may be compromised to reduce their holdings to raise cash.
“Short compressions that cause implosions in some hedge funds join SPAC, IPO and bitcoin as data points supporting a market bubble thesis,” market strategist Scott Knapp said in an email principal of CUNA Mutual Group. “This is a precautionary moment for investors.”
Trading volume exploded in the previous session with 23.7 billion shares changing hands, marking the heaviest trading day since 2007 at least.
Video game retailer GameStop, target of “wallstreetbets” Reddit chat room, shot up another 134% on Wednesday, boosting its January earnings to a whopping 1,744%. AMC Entertainment rose more than 300% on Wednesday alone, experiencing its highest volume in history.
GameStop fell 7% in expanded trading, while AMC Entertainment fell 20%. Other very short names that had been concentrated this week, including Bed Bath & Beyond and National Beverage, also fell after hours.
Facebook shares remained relatively flat in after-hours operations after the company warned that a reversal of pandemic trends could hurt its advertising business. The social media company surpassed the top and bottom line of the fourth quarter.
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