Stock futures fell Tuesday evening, after another drop in tech names dragged the three major indices to their lowest closing level in one month.
The carnage continued in some of the same names in late trading as in the regular session. Shares of Amazon (AMZN), Facebook (FB) and Apple (AAPL) each extended losses after market close, as investors continued to pour out of the leaders from the past several months. Tesla (TSLA) shares fell further as well, after the stock slumped 21% in its worst single session decline on record earlier in the day.
“I think they definitely have more to go on the downside before they bounce in any kind of meaningful way,” Matt Maley, chief strategist at Miller Tabek, told Yahoo Finance’s The First Trade on Tuesday, in discussing the recent selloff in big tech shares. “These are great companies on a long-term basis, but since they got so far ahead of themselves, I think they’ve got further to drop, and they won’t bounce back as quickly as a lot of people think they will.”
Even after the past several sessions’ worth of sharp declines, Amazon’s stock remained higher by 70% for the year to date, Apple’s held higher by 54%, and Facebook’s by 32%. That compares to a 3% gain for the S&P 500 over the same time period.
Other strategists echoed similar sentiments, suggesting investors should brace for volatility in the near-term especially in growth and tech names.
“We think there is more downside over next month but eventually leads to further broadening out of the bull market,” Morgan Stanley strategist Mike Wilson said in a note Tuesday. “The S&P may be range bound for the rest of year making stock picking critical.”
The risk-off sentiment also spilled over into other asset classes, with US crude oil prices (CL=F) dropping 7.6% to settle at their lowest level since June Tuesday afternoon. This came after Saudi Aramco slashed its October crude prices by a greater than anticipation margin, signaling its expectation for extended weakness in energy demand as individuals continue to eschew travel and other discretionary consumption during the pandemic.
Meanwhile, on the vaccine front, STAT News reported late Tuesday that a late-stage trial of a Covid-19 vaccine candidate being studied by AstraZeneca (AZN) and the University of Oxford was being put on hold, due to safety concerns after a suspected serious adverse reaction in a participant in the U.K. Shares of AstraZeneca sank 5% in late trading, while those of companies competing to develop a Covid-19 vaccine including Moderna (MRNA) and Novavax (NVAX) rose.
6:03 p.m. ET Tuesday: Stock futures extend decline, led again by a drop in tech shares
Here were the main moves in equity markets, as of 6:03 p.m. ET:
S&P 500 futures (ES=F): 3,309.75, down 25.75 points or 0.77%
Dow futures (YM=F): 27,306.00, down 219.00 points or 0.8%
Nasdaq futures (NQ=F): 10,975.25, down 85.25 points, or 0.77%