Stock Futures Drop, Led by Retreat in Technology Stocks

US stock futures fell Thursday despite new weekly data showing continued labor market rebound.

S&P 500-linked futures fell 0.7%, suggesting a decline in broad market measure after the opening bell. It Floor 0.1% higher On Wednesday. The Nasdaq 100 futures fell 1% Thursday, suggesting a retreat for technology stocks.

The latest numbers on initial jobless claims showed that 385,000 people applied for unemployment insurance last week, a new pandemic low.

Investors said Friday’s job report will provide insight into the rebound in the job market, which Fed officials say remain concerned.

The downturn in futures “reflects a certain nervousness about the data. The volatility in the markets has been low lately, so the potential for surprise is great, ”said Sebastien Galy, macro strategist at

Nordea Asset Management.

NDA.FI 0.43%

“That could shock the market quite considerably.”

The U.S. private sector outside of agriculture created 978,000 jobs, compared to 742,000 in April, according to a report by ADP Thursday. At 623,000, that was significantly higher than economists had expected.

The major indices have been sluggish this month as investors weighed some signs that the economic recovery can slow down or stall, strengthening knotted supply chainsbol Input costs for a range of products. Concerns about the high valuations of many stocks after the month-long rally in US markets are also causing some investors to pause.

A Federal Reserve report on Wednesday noted an increase in growth as consumers return to restaurants and stores, but also said: Disruptions in the supply chain and acute labor shortages lead to price increases.

“The focus remains on inflation and central banks and when they taper,” said Caroline Simmons, UK chief investment officer at UBS Global Wealth Management. “If the labor market gets stronger than people expect, the debate will be sparked that the economy is on track, employment growth is good and so we end up getting wage increases and eventually domestic inflation.”

Prior to the market opening, AMC Entertainment Holdings slipped nearly 7%, wiping out its previous profits after filing with regulators to sell more than 11 million new shares. “In these circumstances, we caution you not to invest in our Class A common stock unless you are willing to take the risk of losing all or a significant portion of your investment,” the company said in the SEC filing .

A handful of others now Stocks popular on online forums continued to rise rise in frenzied trade.

blackberry

BB 31.92%

gained over 14%.

Sundial growers

SNDL 13.00%

was also among the other small stocks that saw oversized moves, climbing 9%.

“These are pretty amazing price reactions, but when something goes up that much it usually goes down again because it is not based on fundamentals,” said Ms. Simmons. “These things don’t usually end well, it’s very volatile and people can lose quite a lot of money depending on when they get in and when the stock corrects.”

Polls of purchasing managers, due to be released at 9:45 a.m., are expected to provide insights into the May recovery in the U.S. services industry, which was hit hardest by the lockdowns. Another benchmark for service activities will also go out at 10 a.m.

“We’re seeing some spikes and a plateau in the data,” as the rate of change smooths out from the pandemic lows, said Grace Peters, investment strategist at JP Morgan Private Bank. “This leads to some digestive disorders in the markets: we saw a plateau in the stock markets last month that is very much linked to peak data.”

In the bond markets, the ten-year benchmark bond yield rose from 1.591% on Wednesday to 1.611%. Returns rise when prices fall.

Overseas, the pan-continental Stoxx Europe 600 retreated from a record high and lost 0.6%.

In Asia, the major benchmarks ended trading with mixed feelings. The Shanghai Composite Index lost nearly 0.4% while the Japanese Nikkei 225 gained 0.4%. Hong Kong’s Hang Seng Index fell 1.1%.

Traders worked on the floor of the New York Stock Exchange on Wednesday.


Photo:

Courtney Crow / Associated Press

Write to Anna Hirtenstein anna.hirtenstein@wsj.com

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