Traders on the floor of the New York Stock Exchange
Source: NYSE
Futures contracts, which were linked to the major US stock indices, gained slightly At the start of the overnight session on Wednesday evening after pressure on technology stocks pushed the Nasdaq Composite 2% down during the regular session.
The Dow futures rose 30 points while contracts linked to the S&P 500 rose less than 0.1%. Futures linked to the Nasdaq 100 were also traded just above the flatline.
The overnight moves came after a spike in late sales of high growth and technology stocks during the regular session.
The S&P 500 fell 0.6% after rising as much as 0.8% during the day, while the tech-heavy Nasdaq fell 2% and closed at its session lows. Apple, Facebook, and Netflix all fell more than 2%, while Tesla fell 4.8%.
The Dow Jones Industrial Average, which had outperformed its peers in positive territory for most of the day, fell into the red in the last few seconds of the session. The Dow industrials were up more than 300 points at their session high.
The Dow’s weakness in the afternoon came as the reopening of businesses such as airlines and cruise lines reversed previous strength. Norwegian Cruise Line fell 4.9% while Royal Caribbean and Carnival fell 1.9% and 2.8% respectively. Delta and United Airlines also ended the day lower.
Pressure on stocks rose as bond yields continued to decline from recent highs. The 10-year government bond yield fell 3 basis points to 1.61% on Wednesday, falling a third day after interest rates hit a 14-month high last week.
Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell appeared before federal lawmakers for a second day of virtual testimony. Both reiterated their belief that the U.S. economy will see significant growth in 2021, thanks in large part to fiscal and monetary stimulus.
“It will most likely be a very, very strong year,” said Powell. “There are risks to the upside and downside, of course, but it should be a very strong year in terms of growth … In the longer term, we need to increase revenue to support the sustained spending we want to do.”
Powell and Yellen said Tuesday that asset valuations appear to be elevated in certain areas of the market, but the financial sector is healthy and ready to deal with any market turmoil once the incentives wear off.
