Nasdaq futures down by over 2% ahead of North American trading
It has been a choppy session for US futures, but no love for tech
S&P 500 futures are also seen down by 0.6% currently, after having erased losses earlier to post a slight gain of 0.3% in European morning trade.
But the big loser is tech once again, similar to yesterday, as Nasdaq futures slump by 2%.
The euphoria from the vaccine optimism yesterday faded towards the closing stages of the day and that is leaving a bit of a bitter pill for investors to swallow today.
Although the S&P 500 and the Dow still closed higher, they were at the lows. Meanwhile, the Nasdaq closed 1.5% lower amid the internal rotation within the stock market.
Amid the surge of optimism yesterday, there is scope for more profit-taking as a lot of the good news ahead of the year-end has already been baked in. Not to mention that even with the drop yesterday, the Nasdaq is just 3% shy of its all-time highs.
As much as tech has been the poster child of the pandemic and it has carried the stock market gains over the past seven months, I don't quite see cyclical stocks as having the same impact or even matching the consistency of the gains in tech.
Investors are searching for cheap bargains in cyclicals, but the returns there may take a really long time to play out considering we are still not out of the pandemic tunnel just yet. There are still many more months of uncertainty to deal with in the meantime.
So, if tech isn't going to be the one carrying the market on its back, odds are that equities may be in for more choppy days moving forward unless investors figure that the rotation play may be a bit too early in the game - for now at least.