Stock-index futures pointed to further losses for equities on Tuesday, with inflation worries seen keeping pressure on previously highflying tech stocks.
What are major benchmarks doing?
On Monday, a tech-led selloff sent the Nasdaq Composite COMP down 2.6% to its lowest close since March 31, while the S&P 500 SPX slumped 1%. The Dow DJIA gave up a gain of more than 300 points that had taken it to an all-time high above 35,000 to end the day down 34.94 points, or 0.1%.
What’s driving the market?
Further pressure on Big Tech shares appeared in store, with shares of Facebook Inc FB. Apple Inc. AAPL, Amazon.com Inc. AMZN, Netflix Inc. NFLX, Microsoft Corp. MSFT and Google parent Alphabet Inc. GOOG GOOGL down more than 1% in premarket activity.
“There isn’t a clear catalyst behind this purge,” said Marios Hadjikyriacos, investment analyst at XM, in a note. “It seems to be a combination of inflation fears making a comeback and some market participants moving higher along the value spectrum, cutting their exposure to anything with a stretched valuation.”
The fact that the selloff has been mostly concentrated in tech and growth stocks, however, is encouraging in terms of the overall market outlook, Hadjikyriacos said, because it indicates investors haven’t lost faith in the economic outlook but are moving away from “more speculative” positions, which could even calm some “bubble concerns, considering what is being sold.”
Investors continue to focus on the labor market after a much smaller-than-expected rise in nonfarm payrolls in March was reported on Friday.
The National Federation of Independent Business said Tuesday its monthly survey found a record 44% of small businesses said job openings went unfilled in April.
Data on U.S. March job openings is due at 10 a.m. Eastern.
Investors will also hear from several Federal Reserve officials on Tuesday, including New York Fed President John Williams, Fed Gov. Lael Brainard, San Francisco President Mary Daly, Atlanta Fed Raphael Bostic, Philadelphia Fed President Patrick Harker, and Minneapolis Fed President Neel Kashkari.
Which companies are in focus?