U.S. stock index futures rose in overnight trading on Thursday as heavyweight technology stocks appeared to pare back painful losses from recent sessions, with focus shifting to key upcoming inflation data.
Stock futures rose after Wall Street had another mostly negative session following some big, disappointing gains in the technology sector earlier this week. But now it appears that the pace of losses in tech stocks is slowing.
The Saudi stock market index rose 0.3% to 5,456.0 points, while it rose 0.3% to 19,049.0 points by 20:16 ET (00:16 GMT). The index rose 0.2% to 40,284.0 points.
Tech stocks steady in after-hours trading after heavy losses
Tech heavyweights were steady in after-hours trading after posting steep losses last week. The selloff in tech intensified this week following disappointing earnings from Tesla (NASDAQ:TSLA) and Alphabet (NASDAQ:ALFABT), with the latter likely to set a precedent for other internet giants’ earnings.
Shares of Tesla Inc., Nvidia Corp. (NASDAQ:), Microsoft Corp. (NASDAQ:) and Apple Inc. (NASDAQ:) moved in a narrow range, but Alphabet Inc. saw extended losses after OpenAI Inc. unveiled an artificial intelligence search engine aimed at competing directly with Google.
The tech earnings season is set to continue next week, with Microsoft and Apple set to report earnings on Tuesday and Thursday, respectively. Advanced Micro Devices Inc (NASDAQ:), Qualcomm Incorporated (NASDAQ:) and Amazon.com Inc (NASDAQ:) are also set to report earnings next week.
But the continued decline in the technology sector saw the index close down 0.9% at 17,181.72 on Thursday — its weakest since early June. The index fell 0.5% to a more than one-month low of 5,399.22, while the index rose 0.2% to 39,935.07, benefiting from some defensive buying.
PCE inflation data is coming
The selling in the technology sector was also driven by growing expectations of lower interest rates, prompting investors to book profits in the sector and shift to stocks with greater exposure to the economic recovery.
Data due later Friday is set to provide further clues on interest rates. The reading represents the Fed’s preferred inflation measure and is likely to influence the central bank’s stance on interest rates.
The reading comes just days before next week. The central bank is widely expected to keep interest rates on hold, while investors will be watching for any signals on when it will start cutting rates.
The general consensus is for a 25 basis point rate cut in September.