US pre-open: Stock futures slip as recent rally runs out of steam

21st Jun 2024 11:59

(Sharecast News) - US stock futures were pointing to a negative start on Wall Street on Friday, with the S&P 500 and Nasdaq both set to continue their retreat from recent record highs.

The indices suffered a late-afternoon sell-off on Thursday after a sharp reversal in the share price of heavyweight chip giant Nvidia, which earlier this week overtook Microsoft to become the world's largest listed company.

The stock rapidly dropped from a 3.8% gain to a 3.5% loss in the space of a few hours, wiping $246bn off its market value and dragging the S&P 500 and Nasdaq into the red by the close. Both benchmarks had hit new record highs on Tuesday before the Juneteenth national public holiday.

With Nvidia futures pointing to further falls of around 1.3% in pre-market trading, the three main Wall Street benchmark indices were showing a 0.1% loss in pre-market trade just before 0600 EDT.

"In the jockeying of position for the mantle of the world's largest company, Microsoft is back ahead by a nose," said AJ Bell investment director Russ Mould. "Nothing has gone wrong at Nvidia, which reached the number one spot earlier this week, it's just the usual fluctuations in the stock market which, with such large companies, can wipe or add hundreds of millions or even billions of dollars to their market value."

Investors will be focused on another raft of economic data on Friday, following some disappointing figures the previous session with housing starts and building permits dropping to their worst levels since mid-2020.

The S&P Global services and manufacturing gauges will be released at 0945 EDT, and are both expected to show that activity growth had eased slightly in June. Existing home sales, due out at 1000 EDT, are forecast to have slipped to 4.1m in May from 4.14m the month before.

In equity news, Microsoft was falling in pre-market trade - though now as much as Nvidia - with comments from Citi helping to limit losses after the bank lifted its target price for the stock from $495 to $520 and reiterated a 'buy' rating.

Gilead Sciences was extending gains made the previous day after the company announced positive results from a phase 3 trial of its HIV prevention drug.