U.S. stock futures retreated on Friday, signaling a retreat from all-time highs, as European unrest rattled nerves and put Elon Musk’s Tesla (TSLA) victory in the spotlight.
Dow Jones Industrial Average futures (YM=F) fell about 0.7% to lead the declines, while S&P 500 futures (ES=F) fell 0.5%. Contracts on the tech-heavy Nasdaq 100 (NQ=F) were down about 0.2%.
Stocks are losing steam after the benchmarks S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) hit record closes for the fourth day in a row, boosted by the strength of the technology sector. A surprising cooling of pressure on wholesale prices gave investors courage to bet on two rate cuts this year, as the decline is seen as likely to be reflected in the upcoming PCE inflation numbers being monitored by the Federal Reserve.
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But the Fed this week cut expected rate cuts from three to one in 2024, keeping the market guessing and stocks vulnerable to mood swings. The tech sector’s strength has led to broader gains, helping the S&P 500 and Nasdaq post weekly gains — at least for now. But the Dow Jones is facing a loss this week as questions remain about the size of this year’s rally.
Meanwhile, Tesla shares rose about 1% in Friday’s premarket after shareholders reapproved CEO Elon Musk’s $56 billion pay package. Despite opposition from some major investors, 77% of votes were cast in favor, the EV maker said.
Not helping the mood was a slump in European stocks (^STOXX), which were heading for their worst week since October. Investors are concerned about the consequences for markets if the far right makes gains or even wins early elections in France.
Another dose of concern came from the Bank of Japan’s decision not to announce details of the government purchase cut until July, a surprise move that was interpreted as postponing an interest rate hike.
Among individual movers, shares of Adobe (ADBE) rose 15% after an optimistic AI sales forecast from the Photoshop maker.
