Stock futures gave up a small gain and turned red in early morning Thursday as the market continued to struggle in recent weeks.
The rollover in futures came as Federal Reserve Chairman Jerome Powell hinted at one day starting to remove the stimulus that has boosted the market during the pandemic.
Dow Jones Industrial Average futures dipped 110 points, while futures contracts tied to the S&P 500 and Nasdaq 100 were also lower by 0.4%.
Fed Chairman Jerome Powell said congressional stimulus and accelerated vaccine distribution has allowed the economy to recover faster than expected. At some point, that will allow the Fed to start pulling back on the help it has provided.
“As we make substantial further progress toward our goals, we’ll gradually roll back the amount of Treasurys and mortgage-backed securities we’ve bought,” Powell told NPR’s “Morning Edition.” “We will very gradually over time and with great transparency, when the economy has all but fully recovered, we will be pulling back the support that we provided during emergency times.”
Investors will on Thursday pore over the Labor Department’s latest report on jobless claims. The department is expected to report that 735,000 Americans filed for unemployment last week.
A steep sell-off in high-growth and technology shares led the broader market lower on Wednesday. The S&P 500 fell 0.6% in the previous session, while the tech-heavy Nasdaq dropped 2% to close at its session low. Apple, Facebook and Netflix all slid more than 2%, while Tesla fell 4.8%.
“The weakness in technology stocks is undeniable, but it likely won’t be a straight line down for the sector and there will be zigs and zags along the way,” said David Bahnsen, chief investment officer at The Bahnsen Group. “Tech stock valuations are too high and are screaming for a correction.”
Pressure on equities came even as bond yields continued to decline from recent highs. The 10-year Treasury yield dipped 3 basis points to 1.61% Wednesday, falling for a third day after the rate hit a 14-month high last week.