Stock Futures Steady After Nasdaq's Toughest Day Since October
Stock futures remained stable in overnight trading following a challenging session for the Nasdaq Composite, which experienced its worst day since October. Dow Jones Industrial Average futures saw a minimal slip of 2 points, while S&P 500 and Nasdaq-100 futures hovered near the flatline.
In post-market developments, Bloomin’ Brands, the parent company of Outback Steakhouse, saw its shares jump over 5% after announcing the addition of two new board members, a move in line with an agreement with activist investor Starboard Value.
The first trading day of the year marked a rough start, with the S&P 500 dropping 0.6% and the Dow barely staying afloat with less than a 0.1% rise. The tech-heavy Nasdaq Composite fell significantly by over 1.6%, largely impacted by major technology stocks and a notable 4% decline in Apple's stock following a downgrade by Barclays.
Key players in artificial intelligence, Nvidia and Advanced Micro Devices, experienced declines of 2.7% and 6%, respectively. Tech giants Alphabet and Microsoft also saw losses exceeding 1%. The semiconductor sector felt the impact as well, with the VanEck Semiconductor ETF dropping 3.4% and Intel declining by 4.9%.
Chris Verrone of Strategas commented on CNBC's "Closing Bell: Overtime" about the market dynamics, noting that while short-term corrections are typical in a market recovering from recent highs, the longer-term outlook remains positive over the next six to twelve months.
The stock market has rebounded impressively from a tough 2022, with the S&P 500 gaining over 24% and the Nasdaq climbing 43% for its best performance since 2020. This resurgence is attributed to subsiding inflation, a decrease in the 10-year Treasury yield, and expectations of an end to the Fed's aggressive rate hikes, fostering hopes for a stable economic landing. Market sentiment has been buoyed by these factors, and current expectations suggest a 70% likelihood of rate cuts beginning in March.
Investors are keenly awaiting the release of minutes from the Fed's December policy meeting and comments from Richmond Fed President Tom Barkin for insights into future rate decisions. Upcoming economic reports, including the job openings data for November and the ISM manufacturing index for December, are also anticipated to influence market movements.
