U.S. stock futures were modestly higher early Friday as Wall Street looked to shake off a broad sell-off during market hours.
Futures contracts for the Dow Jones Industrial Average implied an opening gain of about 75 points. Futures for the S&P 500 and the tech-heavy Nasdaq 100 also rose.
The moves come after the stock market struggled on Thursday, with tech stocks being particularly hard hit. The Nasdaq Composite fell 3%, with Apple and Amazon seeing slightly larger losses. The Dow and S&P 500 slipped 0.5% and 1.5%, respectively.
The weakness in stocks was mirrored by a spike in bond yields, with the benchmark 10-year Treasury yield breaking above 1.7%, its highest level since January of last year. Yields move inverse of prices. Rising bond yields, which can signal confidence about the economic recovery and fears about inflation, make high growth stocks look less attractive to investors.
On Thursday evening, futures contracts for the 10-year Treasury rose in price, suggesting that traders were not expecting another spike in yields on Friday.
The underperformance of tech and other growth stocks on Thursday resembles a trend seen in recent months as value stocks have surged. However, growth stocks have had a few strong days over the past two weeks and this is muddying the waters, said Michael Mullaney, director of global markets research at Boston Partners.
“If you look at the price pattern on a day-to-day basis for the last now seven days, we’ve got a ping-pong match going on. One day it’s been growth, one day it’s been value,” said Mullaney. “I’m not sure if that’s indicating we’re at some kind of inflection point where growth might get a bounce here.”
Energy stocks were also hit hard on Thursday, with the price of West Texas Intermediate crude sliding by more than 7%. The slow rollout of vaccines and rise in Covid cases in Europe have weighed on the near-term demand outlook for oil.
After the bell on Thursday, shares of FedEx jumped after the delivery company beat expectations on the top and bottom lines for its fiscal third quarter, while Nike‘s stock slipped after third-quarter revenues were weaker than anticipated.