Traders work on the floor of the New York Stock Exchange on July 11, 2024.
Spencer Platt | Getty Images
U.S. stock futures were little changed Friday morning after the S&P 500 had its worst session since April, dragged lower by investors’ rotation out of megacap tech stocks.
S&P 500 futures were marginally higher. Futures linked to the Dow Jones Industrial Average were up around 0.1%, while Nasdaq 100 futures fell 0.11%
During the main trading session, the broad market index closed 0.88% lower, and the tech-heavy Nasdaq Composite lost 1.95%. Both indexes broke seven-day winning streaks and they suffered their worst day since April 30. Investors sold their Big Tech winners, pushing Nvidia lower by 5.6% and leading to a 4.1% decline for Meta Platforms. The 30-stock Dow was the outperformer among the three major averages, inching higher by 0.08%.
On a weekly basis, the Dow is also beating the other two major averages, up nearly 1%. The S&P 500 is up 0.3% through Thursday’s close, while the Nasdaq is down nearly 0.4%.
Investors’ move out of tech stocks on Thursday was spurred by a consumer price index report that showed a 0.1% monthly decline in June. Traders flocked to areas of the market that will benefit from Federal Reserve interest rate cuts, including small-cap stocks. Indeed, the Russell 2000 jumped about 3.6%.
The market rotation during the session is “a taste of what’s going to happen the second half of the year,” Warren Pies, strategist and co-founder of 3Fourteen Research, said on CNBC’s “Closing Bell.”
The upcoming corporate earnings season and a credit expansion narrative will power the market to the end of the year, he added.
“We’ve had a pretty strong economy in a lot of ways over the last few years, but there are pockets that are really restrained by Fed interest rate policy,” Pies said. He noted that as central bank policymakers cut rates, corners of the economy that have been “dormant,” such as existing home sales and new auto sales, will “reawaken.”
Several financial services giants are set to report earnings Friday morning. JPMorgan Chase, Wells Fargo and Citigroup are all scheduled to post their quarterly results before the bell.
On the economic front, traders will be looking toward June’s producer price index results. July’s preliminary consumer sentiment numbers from the University of Michigan are also due.
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