Nasdaq futures decline signaling more tech pain

U.S. index futures traded marginally lower, with the selling concentrated in Nasdaq 100 contracts, signaling a rout in technology stocks may continue. Treasuries were mixed as investors weighed the Federal Reserve’s tightening path against the spread of the pandemic.

U.S. index futures traded marginally lower, with the selling concentrated in Nasdaq 100 contracts, signaling a rout in technology stocks may continue. Treasuries were mixed as investors weighed the Federal Reserve’s tightening path against the spread of the pandemic.

Nasdaq 100 futures traded 0.4 per cent lower amid caution over the impact of higher yields on equity valuations. S&P 500 Index futures were little changed, while Europe’s Stoxx 600 gauge traded near a record high. The dollar weakened. Pfizer Inc. advanced in New York premarket trading after BofA Global Research recommended the stock. 

Markets got another reminder of the continuing threat to global growth from the pandemic as Hong Kong reimposed social curbs and halted flights from eight countries. Meanwhile, a selloff in technology stocks extended to Asia, sending a gauge of Chinese names listed in Hong Kong toward a six-year low. Traders are now caught in a quandary over deepening fears on global growth combined with a faster tightening by the Federal Reserve.

“Earlier we thought that rate hikes wouldn’t be on the table until mid-2022 but the Fed seems to have worked up a consensus to taper faster and hike sooner rather than later,” Steve Englander, head of global G-10 FX research at Standard Chartered, said in a note. “But we don’t think inflation dynamics will support continued hiking. We suspect the biggest driver of asset markets will be when inflation and COVID fears begin to ebb.”

Data Tuesday showed mixed signs on U.S. inflation. Prices paid by manufacturers in December came in sharply lower than expected. However, figures showing a faster U.S. job quit rate added to concerns over wage inflation.