US Equity Futures Edge Lower as Tech and Oil Rise
- As anxiety persisted following a major technology sell-off and U.S.
- Futures tied to the S&P 500 were down 0.5% and Dow Jones Industrial Average futures fell 480 points, or 0.9%.
- Big Tech shares such as Microsoft and Meta were slightly down in early trading on Friday, following a broader retreat across technology stocks as traders assessed the impact...
As anxiety persisted following a major technology sell-off and U.S. oil prices topped $100 a barrel amid growing concerns that the U.S.-Iran conflict might reignite, U.S. equity futures dipped on Friday.
Futures tied to the S&P 500 were down 0.5% and Dow Jones Industrial Average futures fell 480 points, or 0.9%. Nasdaq-100 futures pulled back 0.3% in early trading.
Technology Stock Pressures and Borrowing Concerns
Big Tech shares such as Microsoft and Meta were slightly down in early trading on Friday, following a broader retreat across technology stocks as traders assessed the impact of outsized corporate borrowing and rising interest rates on artificial intelligence initiatives. CoreWeave, widely viewed as a prominent example of a data center firm relying heavily on debt financing, slid 10% on Thursday and then lost an additional 1% during early trading.
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Chip stocks rebounded slightly on Friday, with Micron Technology and Advanced Micro Devices ticking up 1% in off-hours trading. Ed Yardeni, president of Yardeni Research, described the artificial intelligence trade on Thursday as a bubble but stated that some depressurization would not be harmful.
Taking some air out of the AI bubble is a good thing. I don’t think it’s going to burst and create problems for the economy
Ed Yardeni
Yardeni also pointed to the bond market as a source of capital competition for equities. The 10-year Treasury yield added 1 basis point to 4.9697% on Friday, while the 30-year yield was flat and the 2-year yield fell 2 basis points, following a sharp decline in Treasury yields on Thursday as investors sought safe-haven government bonds.
Rising Crude Prices and Geopolitical Pressures
Oil prices moved higher on Friday, adding further pressure to equities as West Texas Intermediate futures rose 1.4% to $100.90 per barrel and Brent crude prices increased 0.75% to $114 per barrel. Amid the regional conflict that commenced in late February, these price increases arrived following reports that Washington and Jerusalem could be formulating strategies for fresh strikes against Iran.
On the week, the S&P 500 headed for a slim gain of less than 0.1%, while the Nasdaq tracked down 0.5% for the period. The Dow Jones Industrial Average was on track for a 1.7% advance.