Futures Pointing To Choppy Trading Early On Wall Street
19 Julho 2024 - 10:08AM
IH Market News
The major U.S. index futures are currently pointing to a roughly
flat open on Friday, with stocks likely to show a lack of direction
following recent tech-driven weakness.
A lack of major U.S. economic data may keep some traders on the
sidelines as they digest the notable declines by the tech-heavy
Nasdaq and the S&P 500 over the two previous sessions.
Traders are also reacting to news of a major IT outage
purportedly caused by an update by cybersecurity firm CrowdStrike
(NASDAQ:CRWD), which is plunging by 12.9 percent in pre-market
trading.
The operations of major banks, media outlets, hospitals and
airlines worldwide were affected due to the widespread outage.
Shares of Microsoft (NASDAQ:MSFT) are down by 1.3 percent in
pre-market trading as many of the software giant’s users have also
been impacted by the issue.
Stocks showed a lack of direction in early trading on Thursday
before coming under considerable selling pressure over the course
of the session. With the downward move, the Nasdaq and the S&P
500 added to the steep losses posted in Wednesday’s session.
The major averages all finished the day firmly in negative
territory. The Dow tumbled 533.06 points or 1.3 percent to
40,665.02, the Nasdaq fell 125.70 points or 0.7 percent to
17,871.22 and the S&P 500 slid 43.68 points or 0.8 percent to
5,544.59.
The weakness on Wall Street partly reflected concerns about the
near-term outlook for the markets following the tech sell-off on
Wednesday.
The tech-heavy Nasdaq record its worst day since December 2022
after a report from Bloomberg said President Joe Biden’s
administration is considering tougher trade rules against companies
in its chip crackdown on China.
Bloomberg said the administration has told allies that it’s
considering using the most severe trade restrictions available if
companies continue giving China access to advanced semiconductor
technology.
“Geopolitical tensions have acted as a stark reminder to
investors that even the hottest of all investment trends can meet
bumps in the road,” said Dan Coatsworth, investment analyst at AJ
Bell.
“While the news flow from chip-related companies has been solid,
the market seems a bit more nervous than usual,” he added. “Early
strength in the tech sector on Thursday quickly faded away, leaving
investors wondering if we’re now heading towards a full-blown
correction in the sector.”
In U.S. economic news, the Labor Department released a report
showing first-time claims for U.S. unemployment benefits climbed by
much more than expected in the week ended July 13th.
The Labor Department said initial jobless claims rose to
243,000, an increase of 20,000 from the previous week’s revised
level of 223,000.
Economists had expected initial jobless claims to edge up to
230,000 from the 222,000 originally reported for the previous
week.
Meanwhile, The Federal Reserve Bank of Philadelphia released a
separate report showing growth by regional manufacturing was more
widespread in the month of July.
The Philly Fed said its diffusion index for current general
activity jumped to 13.9 in July from 1.3 in June, with a positive
reading indicating growth. Economists had expected the index to
inch up to 2.9.
The report said most future activity indicators also rose,
suggesting more widespread expectations for overall growth over the
next six months.
The Conference Board also released a report showing a modest
decrease by its reading on leading U.S. economic indicators in the
month of June.
The report said the leading economic index edged down by 0.2
percent in June after falling by a revised 0.4 percent in May.
Economists had expected the leading economic index to dip by 0.3
percent compared to the 0.5 percent decline originally reported for
the previous month.
Airline stocks moved sharply lower over the course of the
session, resulting in a 3.8 percent nosedive by the NYSE Arca
Airline Index.
Substantial weakness was also visible among pharmaceutical
stocks, as reflected by the 3.1 percent slump by the NYSE Arca
Pharmaceutical Index.
Computer hardware and software stocks also saw considerable
weakness, contributing to the continued decline by the tech-heavy
Nasdaq.
Healthcare, banking and gold stocks also moved notably lower on
the day, while housing stocks turned in a strong performance, with
the Philadelphia Housing Sector Index jumping by 2.1 percent.
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