Stock index futures are indicating a lower open on Wednesday, with growth stocks experiencing significant pressure.
Futures Performance
Nasdaq 100 futures (NDX:IND) are down by 0.4%, while S&P futures (SPX) and Dow futures (INDU) are both down by 0.2%.
Market Impact of Palo Alto Networks (PANW)
The premarket slump of more than 20% in Palo Alto Networks (PANW) is having a substantial negative effect on tech stocks, contributing to the downward trend in futures. Despite this, some buying support emerged post the Tuesday selloff, with traders gearing up for Nvidia’s (NVDA) earnings after the market close.
Market Analyst Commentary
“Nvidia has experienced a significant shift in market cap rankings, slipping from being the 3rd largest company to the 5th following a -4.35% decline preceding its crucial earnings release,” pointed out Jim Reid from Deutsche Bank. “This marked the stock’s worst performance in a day since October last year.”
“Implied options indicate a potential post-earnings move of 10.5% in either direction, signifying the anticipation of significant market movement. Yet, as history often proves, the outcome might end up being unexpectedly uneventful!”
Treasury Yield and FOMC Meeting
There is a slight decline in rates, with the 10-year Treasury yield (US10Y) falling by 2 basis points to 4.26%, and the 2-year yield (US2Y) also dropping by 2 basis points to 4.59%.
The market is awaiting the release of the minutes from the latest Federal Open Market Committee (FOMC) meeting scheduled for this afternoon.
Impact of US Policy Changes
“The US is on the cusp of potential changes in both monetary and quantitative policies,” mentioned Paul Donovan from UBS. “The perceived lack of effective communication skills by Fed Chair Powell, as compared to his predecessors, has made markets susceptible to volatility driven by shifting policy expectations. The forthcoming FOMC minutes are expected to provide a more thoughtful guidance on the trajectory of future policy decisions.”