Tech Stocks Drag Market DownNasdaq futures are down by more than 1.5% in premarket trading.
Tech Stocks Remain Under Pressure
S&P 500 futures are losing ground in premarket trading as the sell-off in the tech space continues. While S&P 500 futures are down by about 0.5%, Nasdaq futures are down by more than 1.5%.
Shares of Tesla are down by more than 5% in premarket trading after losing 8.5% of value in yesterday’s trading session as Bitcoin continues to move lower. Tesla invested $1.5 billion in the cryptocurrency so Bitcoin’s wild swings have an impact on Tesla’s share price dynamics.
Other tech stocks like Apple , Microsoft , Amazon are also set to open lower amid concerns about their sky-high valuation. Traders have become increasingly worried about valuation of tech stocks after U.S. Treasury yields rallied in February.
If Treasury yields continue to move higher, tech stocks may find themselves under additional pressure which will be bearish for the whole market.
Traders Wait For Powell’s Testimony
Today, Fed Chair Jerome Powell will deliver his semiannual testimony before Congress. He will talk about monetary policy and is expected to comment on the recent increase in U.S. government bond yields.
Powell’s comments may have a major impact on the U.S. dollar and bond yields so traders will watch them closely. Judging by the recent action in the bond market, traders are concerned about higher inflation which would get a boost from the $1.9 trillion stimulus package that is expected to be delivered in the upcoming weeks.
Powell will likely try to calm bond traders in order to stop yields from rising, but it remains to be seen whether his comments will stop the sell-off in the bond market which pushes yields higher.
Oil Pulls Back After An Unsuccessful Attempt To Settle Above The $63 Level
WTI oil has recently made an attempt to settle above the $63 level but failed to develop sufficient momentum and pulled back towards the $62 level.
Most likely, traders will wait for the release of API Crude Oil Stock Change report, which is scheduled to be published today, before making additional bullish bets on oil.
The report is projected to show that crude inventories declined by 5.4 million barrels. If API Crude Oil Stock Change report indicates that crude inventories continue to decline at a fast pace, oil may gain additional momentum which will be bullish for oil-related equities.
For a look at all of today’s economic events, check out our economic calendar.