US stock futures were mostly flat Thursday night as Wall Street tried to shrug off a wide sell-off during market hours.
The futures contracts for the Dow Jones Industrial Average rose by 5 points, while the contracts for the S&P 500 were hardly changed. Futures for the tech-heavy Nasdaq 100 also moved near the flat line.
The moves come after the stock market struggled on Thursday, with tech stocks particularly hard hit. The Nasdaq Composite fell 3%, with Apple and Amazon posting slightly larger losses. The Dow and S&P 500 were down 0.5% and 1.5%, respectively.
The weakness in stocks was reflected in an increase in bond yields. The 10-year benchmark yield on government bonds was over 1.7%, its highest level since January last year. The returns move in reverse to the prices. Rising bond yields, which can signal confidence in the economic recovery and fears of inflation, make high-growth stocks less attractive to investors.
On Thursday evening, futures contract prices for the 10-year Treasury rose, suggesting traders were not expecting any further spike in yields on Friday.
The underperformance of technology and other growth stocks on Thursday is akin to a trend seen in recent months as value stocks rose. However, growth stocks have had some strong days in the past two weeks and that is clouding the water, said Michael Mullaney, director of global market research at Boston Partners.
“If you look at the price pattern for the past seven days every day, we have a ping-pong match. One day it was growth, one day it was worth,” said Mullaney. “I’m not sure if this suggests we are at a tipping point where growth here could get a boost.”
Energy stocks were also hit hard on Thursday, with West Texas Intermediate crude oil falling more than 7%. The slow adoption of vaccines and the rise in Covid cases in Europe have weighed on the near-term outlook for oil demand.
After the bell on Thursday, FedEx shares rose after the delivery company beat expectations for the third quarter of the fiscal year, while Nike shares slipped after weaker-than-expected sales in the third quarter.