U.S. stock futures fell on Friday, signaling a pullback from record highs as turmoil in Europe rattled nerves and Elon Musk’s compensation package drew attention to Tesla (TSLA).
Dow Jones Industrial Average futures (YM=F) led the decline, down about 0.7%, while S&P 500 futures (ES=F) were down 0.5%. The tech-heavy Nasdaq 100 (NQ=F) was down about 0.2%.
Stocks are losing steam after the benchmark S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) hit record highs for four straight days, buoyed by strength in tech stocks. An unexpected softening in wholesale price pressures encouraged investors who were expecting two rate cuts this year, as the decline is likely to be reflected in upcoming PCE inflation figures closely watched by the Federal Reserve.
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But the Fed this week cut its forecast for rate cuts in 2024 from three to one, leaving markets perplexed and stocks vulnerable to mood shifts. The S&P 500 and Nasdaq are on track to post weekly gains, at least for now, as strength in tech stocks led broader gains. But the Dow is set to face losses this week as questions remain about the extent of its gains this year.
Meanwhile, Tesla shares rose about 1% in premarket trading on Friday after shareholders reapproved CEO Elon Musk’s $56 billion compensation package. The electric vehicle maker said 77% of shareholders voted in favor of the deal, despite opposition from some large investors.
A sell-off in European stocks (^STOXX) has also dampened investor morale, with the pair on track for their worst week since October, as investors worry about the impact on markets if the far-right gains power or wins the French general election.
Adding further concern was the Bank of Japan’s surprise decision to not announce details of its bond purchase reduction until July, which could be interpreted as a delay to raising interest rates.
Among individual stocks, Photoshop maker Adobe (ADBE) shares rose 15% after the company reported strong AI sales forecasts.
