U.S. stock futures fell on Thursday night following a massive decline sparked by tech shares during regular trading.
Dow Jones Industrial Average futures dipped 101 points, or 0.4%. S&P 500 futures were down by 0.4% and Nasdaq 100 futures slid 0.8%.
The Dow slid more than 800 points, or 2.8%, during the cash session for its biggest one-day decline since June. The S&P 500 plunged 3.5% and the Nasdaq Composite dropped 5%. Thursday’s declines also wiped out the major averages’ gains for the week and knocked both the S&P 500 and Nasdaq off record levels.
As a sector, tech had its worst day since March, falling 5.83%. Apple contributed a big portion of those losses, falling 8%. Facebook, Amazon, Netflix, Alphabet and Microsoft also closed Thursday’s session sharply lower.
Those steep declines in tech shares come after the space drove the lion’s share of the broader market’s comeback off the coronavirus sell-off lows. Since March 23, the S&P 500 tech sector is up about 70%. For the year, tech has rallied more than 30%.
However, some experts have raised concern about the heavy concentration of gains in just a few stocks as it could make the broader market susceptible to a pullback if those names were ever in trouble.
“We’ve had excessive valuations in the markets lately — particularly in the tech sector — and that needed to be corrected to some degree,” said Scott Knapp, chief market strategist at CUNA Mutual Group. “One needs to look no further than the recent irrational run-up in Tesla and Apple share prices after both companies announced a stock split to see overexuberance, especially among retail investors.”
Both Tesla and Apple rallied recently after announcing stock splits. Since those splits took effect on Monday, however, Tesla has dropped 8.1% and Apple has lost 3.2%.
Traders also braced for the release of a key U.S. jobs report. Economists polled by Dow Jones expect the U.S. economy to have added more than 1 million jobs last month.
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