Stock Index Futures Advance as Tech Shares Stage a Rebound

30 Sep 2021 · 3rd Party Analysis

Colorful Polygons With An Upward Trend and a Candle Chart Background. Stock Index Futures Advance as Tech Shares Stage a Rebound


In Summary

  • US stock index futures rise by more than half a percent as investors rush to buy the dip
  • Technology companies were among the best performers in pre-market trading Thursday

Futures Advance on Thursday, Nasdaq Aims for a Rebound

US stock index futures moved higher in pre-market trading on Thursday. Shares of technology companies appeared to have taken the lead in efforts to recoup heavy losses from earlier in the week.

Futures contracts tied to the Dow Jones Industrial Average rose about 200 points. In addition, S&P500 futures gained roughly 0.7%. And lastly, Nasdaq futures advanced nearly 0.9%, or about 130 points, after investors aggressively sold technology firms on Tuesday.

Shares of Microsoft, Facebook, Apple, and Facebook were higher by roughly 0.4% apiece ahead of the regular session on Thursday.

Increased Jitters Rattle the Main Indexes

Today’s positive performance for stocks ahead of the opening shows investors are still optimistic and rushing to buy the dip. Even amid challenges such as the Covid-19 spread, potential negative impact from higher interest rates and political uncertainty, market participants are still pouring fresh money into stocks.

During regular trading on Wednesday, the Dow Jones Industrial Average and the S&P500 were able to push higher and close in the green. Still, the Nasdaq Composite was a decliner for another day. The tech-centered index slipped for its fourth consecutive session and is now facing a loss of about 4% on the week.
The other two benchmark indexes are also deeply in negative territory for the week. The 30-stock Dow Jones is on pace to log its fourth losing week in the last five.

Technology shares have been particularly affected by the projected increase in interest rates. Tech stocks, falling into the category of the growth sector, are looking less attractive in a high-interest rate environment. This is mainly because it makes promised future earnings growth and cash flows are worthless.

Fears of a US Default Creep into the Financial Markets

Meanwhile, investors continue monitoring the latest developments from Washington. On Wednesday, the House of Representatives passed a bill that would suspend the US debt ceiling. The move came after Treasury Secretary Janet Yellen told Congress the US is heading into a default situation by Oct. 18 if lawmakers did not raise or suspend the debt ceiling.

The bill, however, could face opposition from Senate Republicans. On that note, if they reject the plan, the US will most likely face its first-ever default. If no solution is found around Oct. 18, the consequences of a default could be millions of jobs lost and a potential financial market crisis.

On that note, Democrats have been trying to figure out a way to avoid a default. House Speaker Nancy Pelosi said in a letter that the House of Representatives would “move forward to honor its responsibility to protect the American economy and American families from the catastrophe of a default by passing legislation to suspend the debt limit.”

European Bourses Gain, Bitcoin Jumps to $44K

Elsewhere in the financial markets, European bourses on Wednesday finished the day in positive territory. Investors’ expectations propelled the move-up so the upbeat market momentum could carry on.

Cryptocurrencies swung higher early on Thursday with bitcoin pushing to levels near $44,000 per token. The leading digital currency has endured increased jitters this month. Since Chinese officials introduced a ban on all crypto-related activities last week, the price of bitcoin has been rangebound in the area between $41,000 and $44,000.

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