Stock futures remained flat during trading overnight Thursday after a technology-driven defeat on Wall Street amid rising bond yields.
Dow Jones Industrial Average futures rose just 30 points, while S&P 500 futures changed little. Nasdaq 100 futures fell 0.2%.
All eyes will be on the February work report, which will be published Friday morning. Economists expect to see 210,000 payrolls added in February, compared to just 49,000 in January, according to Dow Jones.
The futures movement was followed by strong sales triggered by Federal Reserve Chairman Jerome Powell’s statements about rising bond yields. He said the recent collection drew attention, but gave no indication of how the central bank would slow it down. Some investors had expected the Fed presidency to indicate its willingness to adjust the Fed’s asset purchase program.
The economic reopening could “create upward pressure on prices,” Powell said in a Wall Street Journal webinar on Thursday. Even if the economy sees “transient increases in inflation … I hope we will be patient,” he added.
“The translation of the‘ patient ’market is that the patient doesn’t mean‘ never ’and that Powell indicates that easy money will come to a certain point,” said Mike Loewengart, CEO of Investment Strategy at E – Financial Trade. “So while the verbiage isn’t too far removed from the Fed’s previous stance, it’s enough to move a nervous market south.”
The ten-year Treasury yield jumped above 1.5% after Powell’s comments. The benchmark rate had stabilized earlier this week after a rise to 1.6% last week amid higher inflation expectations.
Technology stocks caused the market to fall, as growth-oriented firms tend to be more vulnerable to higher interest rates. The Nasdaq Composite fell 2.1% on Thursday, raising its losses this week to 3.6%. The technology benchmark also turned negative during the year and fell into correction territory, or fell 10% from the recent high, on an intraday basis.
The S&P 500 and Dow fell more than 1% on Thursday, towards a losing week. Energy topped 2.5% in the previous session amid a jump in oil prices.
“Rates soared once again, which opened the door to higher technology stock sales,” said Ryan Detrick, chief market strategist at LPL Financial. “The positive side is that the economy continues to improve and financial and energy leadership suggests this is not a time to sell everything.”