U.S. stock futures wavered between gains and losses on Thursday after shares fell sharply yesterday.
Futures for the Dow Jones Industrial Average rose 117 points, or 0.3%. Contracts tied to the S&P 500 slipped less than 0.1%, and those for the technology-heavy Nasdaq fell 0.2%. All three indexes fell on Wednesday, with the Nasdaq tumbling 3.6% in its worst day since October 2022.
The losses were led by the Magnificent 7 big-name technology firms that had led gains for most of the past two years. Concern that optimism about artificial intelligence might be overdone, as well as hopes that the Federal Reserve will soon cut interest rates, are fueling a rotation into smaller stocks outside of tech. The release of the first estimate of second-quarter growth could also impact trading on Thursday.
“Markets saw a massive slump yesterday,” said Henry Allen, a strategist at Deutsche Bank. “Given we’ve had that relentless run of gains, in many respects that leaves markets more vulnerable right now, as historically it’s unusual to see such a prolonged run of gains maintained for much longer.”
Bond yields were slightly lower. The rate on the benchmark 10-year U.S. Treasury bond was at 4.244%. The yield on the 2-year note was at 4.371%. The gap between those two yields is close to the narrowest since July 2022.