Dow Jones futures suggest US markets will extend losses on Friday
We examine where futures markets suggest the Dow Jones will open on Friday, what drove markets on Thursday, and some key developments in US tech stocks.
Dow Jones futures in focus
US equity markets continued to fall on Thursday – led by losses in tech, with the Nasdaq 100 shedding 166 points – finishing out the session more than 1,000 points off its recent high.
The Dow Jones Industrial Average (DJIA) fared a little better during Thursday’s session, dropping just 0.47% or 130 points, to finish out the day at the 27,901 point level. On a more granular level, the best performing DJIA constituents were Walgreens Boots Alliance, Dow and Caterpillar; while the worst performing were Goldman Sachs, Salesforce and Nike.
Looking at what is likely to drive markets in the near-term, IG Market Analyst, Kyle Rodda, argued that ‘Absent the inexplicable and self-perpetuating rise in risk assets, along with a US Fed sticking to the sidelines and playing a small target strategy, there’s little reason for the market to be jumping for joy about what lays ahead in the next few months.’
Mr Rodda finished by saying:
‘The US election is being priced as perhaps the most volatile of its kind in market memory. There’s the real possibility the long-awaited round of US fiscal stimulus won’t be agreed to before the election by US Congress. And to really complicate things, there are mounting signs of another wave of COVID-19 infections in the US and Europe.’
At the time of writing, Dow Jones futures traded down some 77 points or 0.28% (12:00 AM New York time), suggesting the key US benchmark would open lower on Friday, 18 September.
Trade after-market moves with IG
Trading pre- and post-market enables you to take a position on key US shares – like Tesla, Apple, Amazon and Netflix – outside normal trading hours.
US tech stocks continue to sell-off
After crossing the 12,000 point mark in early-September, the Nasdaq 100 has sold-off heavily since then, last trading at the 11,080 level.
Looking at how some of the key names in tech have performed over the last five sessions, Facebook has fallen 5.66%, Amazon has dropped 6.23%, Microsoft has dipped 2.11% and Netflix has given up 3.3%. Tesla – seemingly ever-defying the market’s expectations – has actually seen its share price rise in excess of 10% since last Friday – likely in anticipation of the company’s upcoming Battery Day. Tesla’s CEO, Elon Musk, has described this upcoming event as ‘mind blowing’.
Analysts from Morgan Stanley appear comparably optimistic, arguing that 'we expect the event to be potentially narrative changing for Tesla and the battery market' – while also flagging the potential for Tesla to reveal details around a 'cobalt-less battery'.
Morgan Stanley has an Equal-weight rating and $272.00 price target on Tesla.
Of course, this broad sell-off across tech hasn’t seen enthusiasm around the sector wane completely, with many areas of the market still potentially exhibiting signs of ‘irrational exuberance’.
On Wednesday, for example, the much-hyped initial public offering of cloud data storage company Snowflake was launched – with the stock more than doubling during its first day of trade.
While the stock has pulled back from a high of $319.00 per share, at its last traded price of $227.54 per share, it remains significantly above its IPO price.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get commission from just 0.08% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets