Traders at work on the trading floor of the New York Stock Exchange on June 14, 2024.
Brendan Mcdermid | Reuters
U.S. stock futures rose slightly on Wednesday evening after the Nasdaq Composite’s worst session since 2022 as investors pull out of big tech companies.
Dow Jones Industrial Average futures rose 68 points, or 0.16%. S&P 500 futures and Nasdaq 100 futures rose 0.20% and 0.32%, respectively.
In extended trading, Discover Financial rose 3% after its second-quarter results beat expectations. Beyond Meat fell about 16% after The Wall Street Journal reported, citing people familiar with the matter, that the meat substitute company is meeting with bondholders to begin talks on restructuring its balance sheet.
Rotational trading continued during regular trading on Wednesday. The tech-heavy Nasdaq fell 2.8% in its worst day since December 2022, closing below 18,000 for the first time since July 1. The S&P 500 fell 1.4%.
But the blue-chip Dow, which has less exposure to tech trading than the other two indexes, outperformed. The 30-stock index rose 243.6 points, or 0.6 percent, to close above 41,000 for the first time ever.
Wall Street has dumped shares of this year’s artificial intelligence beneficiaries as the growing likelihood of a September rate cut fueled broader market optimism. The Russell 2000 fell 1% on Wednesday, but the small-cap index has risen more than 9% over the past five trading days.
Investors were hoping for a broader market rally amid concerns that the tech-driven rally is losing steam. But some expect the change in leadership won’t be enough to protect stocks from future challenges, including the possibility of an economic slowdown.
“This is a market — a Fed pivot market — two, three months before we expect a cut, exactly as we would expect. A lot of rally in areas like small caps, other areas of the risk market where capital is really being freed up,” Lauren Goodwin, chief market strategist at New York Life Investments, said Wednesday on CNBC’s “Closing Bell.”
“But the reality for the market is that we’re already in a soft landing for the next nine months. And so as we look at why the Fed is cutting rates, and the market starts to understand that reality, it may take a few more months, but we still expect the economy to slow,” Goodwin added.
On the economic front, jobless claims for the week ending July 13 are due Thursday morning. Economists expect claims to come in at 229,000, according to Dow Jones, up from 222,000 the week before.
As for earnings, Domino’s Pizza and Alaska Air are expected to report results before the open on Thursday. Netflix is expected to report results after the close.