Dow futures steady following Nasdaq’s worst day since October

Investing.com – US stock futures saw little movement during Tuesday’s overnight trading, following the ‘s most severe declines since October.

By 6:30 pm ET (11:30 pm GMT) and remained little changed while ticked 0.1% higher.

Bloomin Brands Inc (NASDAQ:), the company behind Outback Steakhouse, experienced a more than 3% rise after announcing the addition of two new members to its board. This move was in line with an agreement the company made with activist investor, Starboard Value.

The commencement of the new year experienced a downturn in stocks, with the falling 0.6%, and the merely edging up by less than 0.1%. The Nasdaq Composite recorded a drop of more than 1.6%, marking its worst day since October. This decline was largely due to a slump in major technology stocks and a near 4% decline in Apple (NASDAQ:), following a downgrade by Barclays (LON:).

Companies that are poised to benefit from artificial intelligence, such as Nvidia (NASDAQ:) and Advanced Micro Devices (NASDAQ:), experienced drops of 2.7% and 6% respectively. Meanwhile, Alphabet (NASDAQ:) and Microsoft (NASDAQ:), both leaders in chatbot technology, lost over 1%. The VanEck Semiconductor ETF (SMH) fell by 3.4%, and Intel (NASDAQ:) saw a 4.9% decrease.

Chris Verrone from Strategas noted on CNBC’s “Closing Bell: Overtime” on Tuesday that the burden of proof is on the bears as we start the year. He pointed out that short-term corrections are not unusual in a market that’s coming off of fresh highs and entering primary season. He also noted that the longer-term setup looks positive on a six- to twelve-month horizon.

The market is recovering from a remarkable year that witnessed all the major averages rebounding from a devastating 2022. The S&P 500 surged by over 24%, marking its longest weekly winning streak since 2004, while the Nasdaq jumped 43% for its best year since 2020.

The shift back into risk assets was driven by easing inflation and a drop in the 10-year Treasury yield, which finished the year below 3.9% after reaching 5% in October. The end of the Federal Reserve’s aggressive hiking campaign and anticipation of rate cuts in 2024, along with increased hopes for a soft landing, has also boosted market sentiment in recent weeks.

The minutes from the Fed’s December policy meeting, due out Wednesday, and comments from Richmond Fed President Tom Barkin, could provide additional insight into the rate path ahead before the central bank meets later this month. The job openings report for November and December’s ISM manufacturing data are also set for release later in the session.

On the bond markets, rates were at 3.947%.

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