U.S. stock futures gained, putting indexes on course to pare some of the sharp losses that have come as investors reposition their portfolios, spooked by the prospect of tightening monetary policy and slowing growth.
Nasdaq-100 futures rose 0.9% Thursday, a day after a late tech selloff dragged down indexes. Futures tied to the S&P 500 rose 0.5% and blue-chip Dow Jones Industrial Average futures added 0.4%.
In premarket trading, Travelers Companies rose over 4% after reporting record net income in the fourth quarter.
American Airlines
Group gained 1.6% after saying it had trimmed its losses.
Netflix
will be one of the first tech giants to post its fourth-quarter results, after markets close, when
PPG Industries
will also report.
The technology-heavy Nasdaq Composite shed 1.1% on Wednesday.
Photo:
BRENDAN MCDERMID/REUTERS
Hong Kong-listed Chinese stocks jumped after an interest-rate cut by China’s central bank lifted shares of property developers and tech giants. The Hang Seng Index rose 3.4%, while mainland China’s Shanghai Composite Index edged down 0.1%. Elsewhere in Asia, the Nikkei 225 rose 1.1%. The pan-continental Stoxx Europe 600 edged up 0.1%.
Faced with the prospect of multiple interest-rate rises, cooling growth and inflation at multidecade highs, investors have been reassessing the pandemic-era playbook that focused on outsize gains for growth stocks, such as tech. In recent sessions, investors have rotated into sectors expected to perform better in the coming year, such as financials and energy.
“I don’t see a whole lot in the market that is really alarming me. There is no one out there saying ‘run for the hills,’ but there are those saying they are going to take off risk and reposition to other areas of the market,” said
Kara Murphy,
chief investment officer of Kestra Holdings.
That has prompted tumultuous trading. On Wednesday, the Nasdaq Composite closed more than 10% below its all-time closing high, putting it in correction territory.
Investors are selling government bonds in anticipation of higher interest rates, pushing up yields, and in the process, pressuring tech companies, whose future earnings become less attractive when compared with bonds with rising yields.
The yield on the 10-year U.S. Treasury note crept down to 1.823% Thursday from 1.826% Wednesday, after rising steadily in recent weeks. Benchmark German bund yields fell further into negative territory, a day after they briefly turned positive. The yield on the 10-year German government bond fell to minus 0.037% Thursday from minus 0.014% Wednesday.
Investors are awaiting data on the U.S. housing market, a bright spot for the economy. The data, due at 10 a.m. ET, is expected to show that existing home sales slowed in December, but were still on track for the best year since 2006.
Brent crude, the international oil benchmark, fell 0.5% to $88.01 a barrel. This follows a rally partly driven by the potential for supply disruptions in Russia and the Middle East. On Wednesday, Brent crude futures hit their highest level since October 2014.
Write to Will Horner at william.horner@wsj.com
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