Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, USA on December 2, 2021.
Brendan McDermid | Reuters
US stock futures were in negative territory early Friday morning as investors resumed selling technology stocks a day after losses in the sector dragged the rest of the market down.
Futures on the Dow Jones Industrial Average lost 27 points, or 0.1%. S&P 500 futures fell 0.2%. The futures on the technology-heavy Nasdaq 100 fell the most at 0.7%.
On Thursday, the tech-focused Nasdaq Composite fell 2.47% for its worst day since September. The other averages recorded more modest losses. The Dow was down 0.08% while the S&P 500 was down 0.87%.
The moves reversed a rally at Wednesday's session that followed the Federal Reserve's announcement that it is halting a more aggressive plan to suspend its bond purchases and that it is considering several rate hikes in 2022.
As investors continued to digest the Fed news as well as the impact of both soaring inflation and the proliferation of the Covid variant of Omicron, they appeared to be switching from high-growth tech stocks to consumer staples.
"As the Federal Reserve becomes more restrictive and expectations of higher interest rates rise, investors are reducing their exposure to growth stocks," said Jim Paulsen, chief investment strategist at The Leuthold Group. "Typically, growth stocks have longer duration compared to value stocks because a larger proportion of their cash flows will come in in the distant future."
The shares of one-time EV favorite Rivian lost 10% in pre-market trading on Friday after the truck maker announced it could miss its 2021 production target.
Elsewhere in the tech sector, Nvidia lost nearly 2% in pre-hours trading, adding to its 6% loss for the week. Tesla stock was down another 1%, adding to its 9% loss for the week.
FedEx stock rose 5% after quarterly earnings and sales exceeded expectations and announced a $ 5 billion buyback. The shipper has also restored its original EPS forecast for 2022.
The market is divided over the week, with the Nasdaq Composite down 2.9% while the S&P 500 lost 0.9% and the Dow only 0.2%.
Bank stocks were somewhat in the green again in early trading on Friday. They were among the biggest winners on Thursday and are higher for the week. Bank of America and Wells Fargo were up more than 2%. Goldman Sachs and JPMorgan were up more than 1%. Verizon's shares rose more than 4% as one of the top performers in the Dow.
Weekly jobless claims were slightly higher than expected on Thursday and housing starts for November were stronger than economists forecast after falling the previous month.
On Friday, Darden Restaurants and Winnebago will announce the quarterly earnings numbers before the bell.