US pre-open: Futures lower following two-day losing streak
21st Feb 2024 11:31
(Sharecast News) - Wall Street futures were in the red yet again on Wednesday after major indices turned in their second losing session in a row.
As of 1230 GMT, Dow Jones futures were down 0.18%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.25% and 0.48% weaker, respectively.
The Dow closed 64.19 points lower on Tuesday as the broader tech sector weighed on markets.
In focus early on Wednesday, chipmaker Nvidia weighed on both the Nasdaq and S&P 500, with sentiment souring ahead of the tech giant's quarterly results later today. Concerns regarding the group's high valuation continued to grow in the lead-up to its earnings announcement. The stock has surged roughly 225% over the past twelve months.
Trade Nation's David Morrison said: "US stock indices are lower again this morning, illustrating the current nervousness amongst investors. There's no doubt that equity prices are quite frothy at current levels, particularly if one considers recent speculation that the US Federal Reserve's next move in interest rates could be a hike, rather than a series of cuts.
"This follows comments last week from former Treasury Secretary Larry Summers, after month-on-month upticks in CPI and PPI. But that in itself isn't enough to dampen the current bullish sentiment, driven by the robustness of the US economy, and historically low unemployment. We may hear more on that with the release of minutes from the FOMC's last monetary policy meeting this evening. US equities have come a very long way since the end of October without any significant pullback. Yet sentiment can turn in an instant. Could Nvidia prove to be the catalyst?"
On the macro front, mortgage applications plunged 10.6% in the week ended 16 February, according to the Mortgage Bankers Association of America, extending the previous week's 2.3% decline. Last week's drop marked the sharpest decline in mortgage demand so far this year and came just shy of matching the 10-month-high decline of 10.7% in the final week of 2023. Applications to purchase a new home dropped 10%, while those to refinance a home sank by 11%.
Still to come, minutes from the Federal Open Markets Committee's latest meeting will be published at 1900 GMT, with traders likely to parse through the release as they look for any hints as to what the central banks' next move will be when it comes to interest rates.
In the corporate space, shares in Palo Alto Networks traded sharply lower in pre-market after the cybersecurity firm slashed full-year revenue guidance, while SolarEdge Technologies also headed south on the back of weak first-quarter guidance.
In terms of earnings, HSBC and Wingstop will report earnings before the bell, while Nvidia and Etsy will report their latest set of quarterly figures after the close.
Reporting by Iain Gilbert at Sharecast.com