Key insights
- U.S. stock futures declined sharply, led by technology stocks such as Meta Platforms, Tesla, and Nvidia, due to geopolitical concerns and a sector selloff. Oil prices rose on speculation of military action against Iran. Treasury yields decreased, and the U.S. Dollar weakened. European and Asian markets also closed lower, with semiconductors and
Investing.com -- U.S. stock futures dropped sharply Thursday morning, with technology stocks leading losses amid increased geopolitical concerns and a continued selloff in the sector, according to JPMorgan's morning market note.
Oil prices climbed 2% to 3% on speculation about potential military action against Iran following the U.S. midterm elections, based on a New York Times report about U.S. and Israeli plans for renewed strikes.
Technology stocks showed particular weakness in premarket trading. Meta Platforms (NASDAQ: META) reversed an initial gain of more than 5% following its earnings report to trade down 2%. Tesla (NASDAQ: TSLA) fell 5.2%, while Nvidia (NASDAQ: NVDA) declined 2.4%.
Treasury yields decreased 3 to 5 basis points across the curve in a bull steepening pattern, driven by flight-to-quality trading and rising French 10-year bond yields. The U.S. Dollar Index weakened by approximately 22 basis points.
Cyclical stocks sold off broadly, while defensive sectors outperformed.
European markets also declined, with the Euro Stoxx 50 and Italian stocks lagging. Semiconductor and electrification stocks were among the worst performers, while defensive and rate-sensitive stocks traded higher. The FTSE 100 fell 0.6%, the Euro Stoxx 50 dropped 1.8%, and Germany's DAX declined 1.0%.
French government bonds came under pressure, with 10-year yields rising 11 basis points to 5.12%, marking a new high in risk premium. German 10-year bunds fell 2 basis points, and UK 10-year gilts declined 1 basis point.
Asian markets closed lower, with Hong Kong's Hang Seng Index down 3.0%, Japan's Nikkei falling 2.7%, and South Korea's KOSPI dropping 3.5%.