U.S. stock futures were lower Thursday morning as the S&P 500 continues to struggle to reach a new all-time high.
Futures for the Dow Jones Industrial Average slipped 210 points. S&P 500 futures declined 0.7% and Nasdaq 100 futures shed 0.9%.
The benchmark S&P 500 sits less than 1% from its all-time high reached earlier last month, but it has been stuck around these levels for about the last two weeks. The S&P 500 is up 12% this year so far.
Stocks that have run up in anticipation of the economy reopening this year were weak in early trading Thursday. Marriott, Carnival, Gap and GE were all slightly weaker in premarket trading.
Most of the early market action centered on meme stock and theater chain AMC Entertainment. The stock was up as much as 20% in premarket trading Thursday after practically doubling in the prior session. Reminiscent of what occurred earlier this year, retail traders rallying together on Reddit have triggered a short squeeze in the stock.
AMC wiped out gains and tumbled 10% in premarket trading after the movie theater chain said it may offer and sell from time to time up to an aggregate of 11.55 million shares of its Class A common stock.
On Wednesday, short-sellers betting against the stock lost $2.8 billion as the shares surged, according to S3 Partners. That brings their year-to-date losses to more than $5 billion, according to S3. Short sellers are forced to buy back the stock to cut their losses when it keeps rallying like this.
The meme stock bubble in GameStop earlier this year weighed on the market a bit as investors worried it meant too much speculative activity was in the stock market. As losses in hedge funds betting against the stock mounted, worries increased about a pullback in risk-taking across Wall Street that could hit the overall market. AMC’s latest surge did not appear to be causing similar concerns so far, but that could change if the stock keeps going higher and triggers similar moves in other stocks.
ADP’s employment report and weekly jobless claims data are due later Thursday morning.
On Wednesday, the 30-stock Dow rose just 25.07 points to close at 34,600.38. Similarly, the S&P 500 and the Nasdaq Composite ended the day up 0.14%.
“It’s unclear if this week’s flat S&P 500 Index is a continuation of the holiday week relaxation, May’s malaise seeping into June, or just part of a broader return to normal(ish) summer,” said Goldman Sachs’ Chris Hussey. “Whatever the cause, markets remain languid, especially after the capital markets bonanza and the pro-cyclical reflation/recovery trades that characterized price action in up until May.”
Energy stocks were the biggest gainers Wednesday, with Occidental Petroleum rising 2.67% and Marathon Oil ticking up 0.94%. The broad Energy Select Sector SPDR ETF rose 1.86%.
The market, focused on the link between inflation pressures and the reopening of U.S. businesses, may be on hold before the release of the jobs report Friday, which is likely to show an additional 671,000 nonfarm payrolls in May, compared to the 266,000 jobs that were added the month before, according to economists polled by Dow Jones.
On Wednesday, other stocks jumped aboard the meme-stock train, including Bed Bath & Beyond, which finished 62% higher as well as Blackberry, whose stock rose almost 32%. GameStop surged 33.2%.