Dow futures were higher even after a losing week on Wall Street as investors scrapped stocks over concerns over the new omicron variant Covid and the Federal Reserve’s decision to tighten policy.
Futures contracts linked to the Dow Jones Industrial Average jumped 244 points. S&P 500 futures were up 0.44%. Futures on the Nasdaq 100 hovered around the flat line.
Nasdaq stock futures were underperforming on Sunday after bitcoin fell sharply over the weekend and as investors continued to rethink ownership of tech stocks with high valuations.
The Dow Jones and S&P 500 fell 0.17% and 0.84%, respectively, on Friday. The Nasdaq Composite slipped 1.92%.
Tesla was the biggest drag on the tech-rich Nasdaq on Friday, with shares of the electric vehicle company slipping more than 6%.
Cathie Wood’s flagship fund, Ark Innovation Fund, has slipped more than 5%, and all of the fund’s holdings are now in a bear market except for two stocks. Teladoc Health, Zoom Video, Roku, Palantir, and Twilio are some of the names that have seen big losses.
The massive sell-off of tech stocks has spread to the crypto world where prices have also fallen. Bitcoin traded around $ 57,000 on Friday morning, but had dipped to around $ 43,000 on Saturday. As of Sunday, the world’s largest cryptocurrency had recouped some of its losses, but it was still trading below the key $ 50,000 level.
Slower-than-expected job growth also contributed to Friday’s massive sales in the market. Non-farm payrolls rose 210,000 last month, the Labor Department said on Friday, lower than the number of 573,000 economists polled by Dow Jones expected.
“A softer impression of the payroll has put the carpet under the feeling of risk,” TD Securities wrote in a note to clients on Friday. As investors fled for protection, the 10-year Treasury yield fell to 1.335%, the lowest since September 21.
The unemployment rate was better than expected at 4.2%, compared to 4.6% in October. Economists had forecast a reading of 4.5%, according to Dow Jones.
âThe number of job growth is disappointing, without a doubt, especially since the investigation period fell before we even knew the name of the latest variant of Covid-19,â said Jeffrey Buchbinder, equity strategist at LPL Financial. âWhile Omicron may dampen hiring a bit over the next two months, we remain confident in our expectations of solid job gains and above-average growth in the US economy in 2022,â a- he added.
Friday’s sales closed a volatile week for major averages as investors rate new information on the omicron variant.
All three major averages ended the week in the red, with the Dow Jones posting a fourth consecutive negative week for the first time since September 2020. The S&P and the Nasdaq Composite were both down for a second consecutive week.
Small cap stocks were particularly hard hit, with the Russell 2000 falling 3.86% on the week.
“Despite our forecast of a flat year for the S&P 500 … we are still bullish on the pockets of the market, including small caps,” Bank of America said in a note to clients on Friday. “Small caps are more domestic, more exposed to picking up spending on services, greater beneficiaries of investments / relocation and are inexpensive compared to large caps,” the company added.
However, Bank of America said the upside potential for small caps depends on whether Covid cases remain under control.
The omicron variant has now been discovered in at least 15 U.S. states, CDC director Dr Rochelle Walensky told ABC News on Sunday.
âWe know that we have several dozen cases and we are monitoring them closely. And we hear about more and more probable cases every day, so that number is likely to increase,â she said in âThisâ Week “.