(Bloomberg) — U.S. stock futures edged higher, led by contracts on the Nasdaq 100 Index, as investors bought the dip a day after a steep selloff in major technology names roiled global financial markets.
In a sign that Monday’s decline was viewed as overdone, futures on the tech-heavy gauge climbed 0.5% as of 5:46 a.m. in New York. The index has slid 8%, losing more than $1.7 trillion in value, since its peak in early September.
The rise in bond yields has pressured tech names as investors exited sectors with frothier valuations and bet that future earnings gains will be less capped by higher rates. The 10-year Treasury yield is around 1.48%, down from 1.54% on Sept. 28.
“Growth factor is rebounding sharply as rates are marginally lower this morning,” said Ankit Gheedia, a derivatives strategist at BNP Paribas. He also said Europe’s tech rally reflects investors shifting toward growth stocks. The technology subgroup in Europe’s benchmark equity index advanced for the first time in eight days on Tuesday.
Facebook Inc., Tesla Inc. and Apple Inc. all rose in U.S. premarket trading, paring some of their hefty losses on Monday.
Even so, sentiment may remain fragile. “With indicative signs of a weakening buy-the-dip strength, fears of a deeper sell-off are rising,” said Bank of America equity derivative strategists led by Nitin Saksena.
Indeed, although the Nasdaq 100’s 14-day relative strength index is at oversold levels for the first time since the pandemic, Citigroup Inc. strategists said rising short bets could threaten bouncebacks.
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