Traders work on the floor of the New York Stock Exchange (NYSE) on July 11, 2024 in New York City.
Spencer Pratt | Getty Images
U.S. stock futures were little changed overnight on Thursday after the S&P 500 posted its worst drop since April as investors pulled money out of large technology stocks.
S&P 500 futures traded little changed. Futures tracking the Dow Jones Industrial Average rose less than 0.1%, while Nasdaq 100 futures were slightly lower.
During the main trading session, market indexes closed down 0.88%, while the tech-heavy Nasdaq Composite Index fell 1.95%. Both indexes ended seven consecutive days of gains and had their worst day since April 30. Investors sold off big tech stocks, with Nvidia down 5.6% and Meta Platforms down 4.1%. The Dow Jones Industrial Average performed best among the big three averages, rising 0.08%.
On a weekly basis, the Dow also outperformed the other two major stock indexes, rising about 1%. The S&P 500 was up 0.3% as of Thursday’s close, while the Nasdaq was down nearly 0.4%.
Investors’ retreat from tech stocks on Thursday was sparked by the release of the Consumer Price Index, which showed a 0.1% decline in June from the previous month. Traders flocked to areas of the market that would benefit from the Federal Reserve’s interest rate cuts, such as small caps. Indeed, the Russell 2000 rose about 3.6%.
The market rotation during this session is “a glimpse of what’s to come later this year,” Warren Paiz, strategist and co-founder of 3Fourteen Research, told CNBC’s “Closing Bell.”
He added that the upcoming earnings season and prospects for credit expansion will drive the market through the end of the year.
“Our economy has done pretty well in many ways over the past few years, but some parts have been really held back by the Fed’s interest rate policy,” said Piesse, who noted that when central bankers cut interest rates, “dormant” corners of the economy, such as existing home sales and new car sales, will “reawaken.”
Several major financial services companies are scheduled to report earnings on Friday morning, with JPMorgan Chase, Wells Fargo and Citigroup all scheduled to report quarterly results before trading hours.
On the economic front, traders will be keeping an eye on the June producer price index, as well as the release of the University of Michigan’s preliminary consumer confidence index for July.
