U.S. stock futures rebounded on Wednesday following a session defined by major weakness in technology stocks.
Dow futures added 58 points and S&P 500 futures gained 0.3%. The biggest gains were with futures on the tech-heavy Nasdaq 100, which bounced 0.5%.
Major tech shares rebounded in early trading. Apple and Tesla gained about 1% each after falling 3.5% and 1.7% respectively on Tuesday.
On Tuesday, investors exited technology and growth stocks, pushing the Nasdaq Composite down 1.9%. Along with losses in Apple and Tesla, shares of Netflix lost 1.2%, and Microsoft dropped 1.6%. Amazon and Facebook shed 2.2% and 1.3%, respectively. Alphabet fell 1.6%.
The S&P 500 wiped out Monday’s gains, dropping 0.7%. The Dow Jones Industrial Average ended the day up about 20 points after dropping more than 300 points at one point Tuesday.
The small-cap benchmark Russell 2000 fell 1.3%. Reopening plays like airlines, casinos and cruise lines also saw selling pressure.
There are a number of possible reasons for the downward pressure, including fears about rising inflation, concerns the Federal Reserve may have to taper monetary stimulus earlier than telegraphed, and the potential for tax hikes in the months ahead.
U.S. equities hit lows of the day following Treasury Secretary Janet Yellen’s comments that interest rates may have to rise somewhat to keep economy from overheating. Later in the day, the former Fed Chairman tempered her comments somewhat, saying she respects the central bank’s independence and was not trying to influence decision-making there. “It’s not something I’m predicting or recommending,” Yellen told the Wall Street Journal’s CEO Council Summit in follow-up comments.
Earnings season continues on Wednesday with reports out from General Motors, Hilton Worldwide, Allstate and Etsy. While earnings have been coming in strong for the first quarter and companies have been raising guidance, stocks are not always moving upward following good news. Investors told CNBC this could mean the positive outlook is already priced into stocks.
Private payroll data will also be released Wednesday at 8:15 a.m. ET. Economists polled by Dow Jones are expecting 800,000 private jobs added in April, compared to the 517,000 in March, according to ADP. These numbers come ahead of Friday’s closely-watched jobs report.
Two key readings on the services sector will also be released on Wednesday morning.
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