Market Update: Stock Futures Decline Amid Tech Woes
Stock futures took a hit Thursday night. The S&P 500 closed lower, primarily affected by declines in Nvidia’s stock. Traders were also cautiously watching for inflation data set to be released Friday morning.
The Dow Jones Industrial Average futures fell by 268 points, or 0.5%. Meanwhile, S&P 500 futures dipped 0.4%, similar to the Nasdaq 100 futures.
After-hours trading saw significant declines in notable software stocks. Salesforce dropped more than 2%, while Microsoft was down about 1%, putting additional pressure on Dow futures. Cybersecurity firm Zscaler reported lower-than-expected deferred revenue and billings for the fiscal second quarter, resulting in almost a 10% plunge. Additionally, CoreWeave shares fell by 8% following disappointing guidance.
The overall market was weighed down by earnings reports from major tech companies, highlighting a sluggish economy. Despite a variety of performances within the tech sector, the S&P 500 saw a decrease of 0.5%, and the Nasdaq Composite dropped 1.2%. The Dow ended the session with a minimal difference of 17 points, or less than 0.1%.
Nvidia’s 5.5% drop was unexpected for many, but investors are still optimistic due to the company’s solid fourth-quarter results and upcoming product launches. However, some market participants expressed concerns about Nvidia’s partnership with OpenAI and broader worries about AI-related investments.
“While Nvidia’s financials indicated robust demand for AI investments, the lack of strong performance in the market has kept its stock price in check,” said Jose Torres, a senior economist at Interactive Brokers. He mentioned doubts about the maturity of modern technology contributing to losses across many top tech stocks.
Thursday’s trading reflected a shift as investors leaned toward more stable sectors, particularly financials and industrials. Ongoing concerns regarding tariffs and U.S.-Iran relations are also influencing investor strategies.
“With increasing uncertainty, many are holding back on their investments,” stated Sameer Samana from Wells Fargo Investment Institute, though he remains hopeful that economic and corporate earnings growth will assist the S&P 500 in overcoming immediate challenges.
Looking ahead, investors are awaiting January’s producer price index, which serves as a gauge of wholesale inflation. Dow Jones economists predict the composite index may hit 0.3%, with the core PPI, excluding energy and food, expected to match that figure.
As February comes to a close, it has been a turbulent month for tech stocks, largely affected by AI disruption concerns. The Nasdaq Composite Index is down 2.5%, poised for its worst monthly performance since March of the previous year. The S&P 500 is also expected to decline by 0.4%, while the Dow looks set for a modest gain of 1.2%.
