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Dow Futures Drop 100 Points As Wall Street Braces for Another Drop Following Sell-Off Thursday

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Key Points

  • Dow Jones Industrial Average futures dropped 101 points or 0.4%. S&P 500 futures tumbled by 0.4% and Nasdaq 100 futures fell by 0.8%.
  • For its biggest one-day fall since June, the Dow dropped more than 800 points, or 2.8 percent, during the cash session. The S&P 500 fell by 3.5% and the Nasdaq Composite plunged by 5%. Declines on Thursday also wiped out gains for the week and knocked both the S&P 500 and Nasdaq off record levels.
  • Tesla and Apple have recently rallied after announcing stock splits. However, after those splits took effect on Monday, Tesla dropped 8.1% and Apple lost 3.2%.
  • Visit The Financial Today’s homepage for more stories.

U.S. stock futures dropped Thursday night following a huge fall in daily trading caused by tech shares.

Dow Jones Industrial Average futures dropped 101 points or 0.4%. S&P 500 futures tumbled by 0.4% and Nasdaq 100 futures fell by 0.8%.

For its biggest one-day fall since June, the Dow dropped more than 800 points, or 2.8 percent, during the cash session. The S&P 500 fell by 3.5% and the Nasdaq Composite plunged by 5%. Declines on Thursday also wiped out gains for the week and knocked both the S&P 500 and Nasdaq off record levels.

As a sector, tech had its worst day since March, down 5.83%. Apple contributed a significant proportion of these losses, which dropped by 8%. Facebook, Amazon, Netflix, Alphabet, and Microsoft also closed the session on Thursday sharply lower.

Those steep declines in tech shares come after the space drove the lion’s share of the broader market’s comeback off the coronavirus sell-off lows. The S&P 500 tech sector has risen by around 70% since March 23. Tech has rallied more than 30 percent for the year.

However, some analysts have raised concerns about the high concentration of gains in only a few stocks and if those names were ever in trouble, it might make the broader market vulnerable to a pullback.

“We’ve had excessive valuations in the markets lately—particularly in the tech sector—and that needed to be corrected to some degree,” said Scott Knapp, chief market strategist at CUNA Mutual Group. “One needs to look no further than the recent irrational run-up in Tesla and Apple share prices after both companies announced a stock split to see overexuberance, especially among retail investors.”

Tesla and Apple have recently rallied after announcing stock splits. However, after those splits took effect on Monday, Tesla dropped 8.1% and Apple lost 3.2%.

Traders also braced for a crucial U.S. employment report being released. Economists Dow Jones polled expect the U.S. economy last month to have created more than 1 million jobs.

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