The major index futures indicate a significantly lower opening on Friday, suggesting that stocks are poised to continue the sell-off observed during the previous session. Weakness among technology stocks may continue to weigh on market amid valuation concerns, as chipmakers Nvidia and Advanced Micro Devices are both tumbling by more than 3 percent in pre-market trading. Tech heavyweights Palantir Technologies and Tesla are also experiencing notable pre-market weakness and are poised for considerable losses this week. “Markets are down across the board as investors fret about cracks in the narrative that’s driven the mother of all tech rallies over the past few years,” stated Dan Coatsworth. He noted, “Investors are concerned about elevated equity valuations and the substantial expenditures on AI occurring concurrently with a fragile jobs market.”
The downward momentum observed on ,market is occurring concurrently with apprehensions regarding the trajectory of interest rates, spurred by recent remarks from Federal Reserve officials. Additionally, there are indications that crucial U.S. economic data may remain unreleased due to the ongoing government shutdown. Reports reveals that the probability of an additional quarter-point rate cut at the forthcoming Federal Reserve meeting has decreased to 53.2 percent, down from 66.9 percent just one week prior. Following a significant decline at the outset of the session, equities experienced additional downward pressure throughout the trading day on Thursday. The major averages exhibited considerable declines following a period of mixed closures over the last two sessions. The major averages concluded the session slightly above their lowest points. The Nasdaq experienced a decline of 536.10 points, representing a decrease of 2.3 percent, settling at 22,870.36. The S&P 500 saw a drop of 113.43 points, or 1.7 percent, closing at 6,737.49, while the Dow fell by 797.60 points, also down 1.7 percent, ending at 47,457.22.
The Dow retreated significantly from the record closing high established on Wednesday, primarily driven by a substantial decline in shares of Disney, which fell by 7.8 percent. Disney faced scrutiny following the release of its fiscal fourth quarter earnings, which, while surpassing analyst expectations, revealed revenues that fell short of projections. Valuation concerns also continued to weigh on tech stocks, with AI darling and market leader Nvidia moving sharply lower along with tech heavyweights like Broadcom and Alphabet. The weakness observed on market may also have indicated uncertainty regarding the release of key U.S. economic data following the conclusion of the longest government shutdown in U.S. history.
President Donald Trump has enacted a short-term funding bill; however, White House press secretary Karoline Leavitt informed reporters on Wednesday that the October jobs and consumer price inflation reports are “likely never being released” due to the shutdown. Consequently, traders and the Federal Reserve might persist in being “flying blind” concerning the robustness of the U.S. economy. Computer hardware stocks exhibited some of the market’s poorest performances on the day, with the NYSE Arca Computer Hardware Index declining by 7.0 percent. Stocks in the semiconductor, networking, and software sectors experienced significant declines, which played a pivotal role in the pronounced decrease observed in the tech-heavy Nasdaq. Excluding the technology sector, gold, financial, and airline equities experienced notable declines, reflecting widespread weakness across market.