U.S. stock futures declined on Thursday, positioning the S&P 500 for a third consecutive day of losses, as pressure mounted from a continued pullback in major technology stocks and a rise in Treasury yields.
Futures for the S&P 500 traded 0.5% lower, while Nasdaq-100 futures fell 0.7%. Dow Jones Industrial Average futures were down 110 points, or 0.2%.
Shares of Oracle and Nvidia extended their recent slide in premarket trading, falling nearly 4% and 1%, respectively. The decline marks a third straight day of losses for the two tech giants amid growing investor scrutiny of high valuations and potentially circular business deals within the artificial intelligence sector. Oracle’s drop was exacerbated after Rothschild Redburn initiated coverage with a sell rating, forecasting a 40% potential decline. The firm argued that the market is “materially overestimating” the impact of recent AI partnerships on Oracle’s core cloud business.
Adding to the pressure on tech stocks was a sharp rise in government bond yields. The 10-year Treasury yield climbed toward 4.19% following the release of stronger-than-expected economic data. Initial jobless claims for the week ended September 20 came in at 218,000, significantly below the 235,000 forecast by economists. Additionally, second-quarter GDP growth was revised upward from 3.3% to 3.8%.
This robust economic picture is fueling speculation that the Federal Reserve may delay future interest rate cuts, a key factor that has supported the market’s recent rally.
Looking ahead, investors remain cautious as they await Friday’s release of the personal consumption expenditures (PCE) price index, a crucial inflation metric. Market participants are also monitoring the risk of a potential U.S. government shutdown, which could lead to significant furloughs of federal workers, according to a memo from the Office of Management and Budget.
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