U.S. stock futures pulled back Friday, led lower by the technology sector, signaling that the major indexes will retreat a day after notching fresh records.
Futures tied to the S&P 500 fell 0.6%, pointing to a decline after the opening bell. The broad-market index climbed to a record on Thursday. Contracts linked to the Dow Jones Industrial Average ticked down 0.1%. The blue-chips index had also closed at an all-time high.
Stocks have broadly rallied this week following a rebound in technology shares and growing appetite for sectors like banking and energy that may benefit from the economy rebounding. On Friday, money managers again pulled funds from government bonds as their appetite for the safest assets waned. That sent yields ticking up and sapped demand for richly valued tech shares.
Prospects for the economy have brightened with President Biden signing the $1.9 trillion fiscal stimulus package on Thursday. He also said every adult in the U.S. will be able to get a vaccine by May 1. The moves are expected to accelerate the reopening and spur growth.
“Markets will take a break after all the news we had yesterday,” said Sophie Chardon, a cross-asset strategist at Lombard Odier. “This all points to the fact that we are in a recovery, especially given all the substantial policy support both on the fiscal and monetary fronts.”
The Nasdaq-100 index ended Thursday up over 3% for the period, following three weeks of declines. Futures tied to the tech-heavy index dropped 1.7% on Friday, suggesting that the sector may give up some of those gains.
“We haven’t been advocating for a major move out of growth stocks,” said David Stubbs, global head of investment strategy at J.P. Morgan Private Bank. “We’ve seen the permanent adoption of many digital technologies, from this shift from the real world to the digital world. I don’t think that shift will reverse.”
His company is also buying financial and industrial stocks, expecting them to benefit from the recovery because they are economically-sensitive sectors.
The yield on the benchmark 10-year Treasury note rose to 1.611%, from 1.525% on Thursday.
“The bigger picture is, vaccines are going to create a sustainable reopening. That is what the market is reacting to,” Mr. Stubbs said. “You’re seeing a rapid reassessment of the macro environment.”
Fresh data on U.S. consumer sentiment will be out at 10 a.m. ET. The University of Michigan’s preliminary reading for March is expected to show an uptick in confidence amid the vaccination rollout and job gains.
Bitcoin climbed to a record high, topping $58,700 in overnight trading. It has since pulled back about 3% to around $57,000.
Overseas, the pan-continental Stoxx Europe 600 slipped 0.5%.
Among European equities,
rose over 8% after the luxury goods maker said it expects its revenue and a measure of profit to be above analysts’ expectations for the 2021 fiscal year.
In Asia, most major benchmarks closed higher. The Shanghai Composite Index added 0.5% and Japan’s Nikkei 225 rose 1.7%. Hong Kong’s Hang Seng Index dropped 2.2%.
A banner for South Korea’s Coupang adorned the New York Stock Exchange facade before the company’s IPO on Thursday.
Photo:
Courtney Crow/Associated Press
Write to Anna Hirtenstein at anna.hirtenstein@wsj.com
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