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US stock index futures were mixed on Thursday morning after the Dow Jones closed at a record high.
Futures contracts linked to the Dow Jones Industrial Average gained 50 points. S&P 500 futures hovered around the flat line while Nasdaq 100 futures traded in negative territory.
The move comes after the Dow jumped 425 points on Wednesday to close at a record high in a volatile session that at one point saw the 30-stock average fall more than 110 points. The S&P 500 rose 1.1%, while the Nasdaq Composite rose 1%. Earlier in the session, the high tech index was down 1.3%.
The rise in rates weighed on equities early in the session, as the 10-year US Treasury yield surged above 1.4% and hit its highest level since February 2020. Higher rates could prompt investors to abandon bonds. stocks to turn to bonds. Higher rates could also hit the growth-oriented tech sector particularly hard.
“Our basic assumption is that rates will continue to rise due to increasing growth and inflation expectations and eventually the Federal Reserve’s normalization,” said Ryan Detrick, chief market strategist at LPL Financial. “We also believe that if rates rise too high too quickly, the Fed will intervene to ensure that the rate hike does not become too restrictive and does not disrupt the stock markets or the real economy,” he said. declared.
Yields peaked after Federal Reserve Chairman Jerome Powell continued to downplay the threat of inflation.
“It seems pretty clear to us that the rate move was driven by growing optimism about economic growth, and that rates are finally ‘catching up’ to the bullish growth outlook for equities,” said David Lefkowitz, Head of Americas Equities at UBS Global Wealth Management. “So equity investors shouldn’t be too worried.”
On the data front, the first jobless claims figures will be released Thursday at 8:30 am ET, with economists polled by Dow Jones expecting a circulation of 845,000 copies. Also at 8:30 a.m. ET, the U.S. Department of Commerce will release its second estimate of fourth-quarter GDP.
It will also be a busy day on the earnings front with a number of companies expected to release quarterly results. Best Buy, Papa John’s, and Domino’s Pizza are among the names on the deck before the opening bell. After the market closes, Salesforce.com, Beyond Meat, Etsy and Caesars Entertainment are among the names reported.
New state-owned companies Airbnb and DoorDash are also expected to release results on Thursday after the closing bell.
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