Stock Futures Drop as Markets Extend Losing Streak
Traders on the floor of the NYSE, May 11, 2023. Source: NYSE
Stock futures took a hit on Friday as the major averages experienced a third consecutive day of declines. The Dow Jones Industrial Average futures fell by 185 points, or 0.5%, while S&P 500 futures and Nasdaq-100 futures declined by 0.6% and 0.9% respectively.
This downward trend is putting the Dow on track for its worst week since March, with a 2.29% drop through Thursday. The S&P 500 is also set to experience a third straight week of losses, a feat which hasn’t occurred since February. Additionally, the Nasdaq Composite is poised for its third consecutive losing week, marking the first time this has happened since December.
In lockstep with these losses, the Dow Transports and Russell 2000 are each facing their worst weeks since March.
However, amidst the negativity, there have been some positive earnings reports. Applied Materials saw almost a 3% increase in share value after beating analysts’ expectations on both the top and bottom lines. Ross Stores also experienced a boost of around 5% after exceeding second-quarter forecasts.
Looking ahead, Palo Alto Networks is scheduled to release its earnings report after the market closes on Friday.
Thursday saw the Dow close below its 50-day moving average for the first time since June 1, which is viewed as a bearish signal for investors. The 30-stock index tumbled by 290.91 points, or 0.84%, while the S&P 500 declined by 0.77% and the Nasdaq Composite slid by 1.17%.
Amidst these market movements, the 10-year U.S. Treasury yield rose to its highest level since October 2022 on Thursday. This increase followed the July meeting minutes from the Federal Reserve, which indicated a possible continuation of interest rate hikes due to concerns over inflation.
However, some experts view this rise in yields with caution. Guy Adami of Private Advisor Group expressed his opinion, stating, “Rates are not going higher for the right reasons in my opinion… This is now a confluence of events going on globally. We’re at levels we haven’t seen in quite some time.”
Adami also highlighted the potential impact on global equity markets if yields continue to rise at their current pace.
As the markets continue to face volatility and uncertainty, investors will closely monitor earnings reports and the impact of global events on stock performance.