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Stock futures are slightly lower after losing in tech stocks

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US stock futures were slightly lower in early morning trading Tuesday after a technology-driven sell-off fueled by rising bond yields that saw the Nasdaq Composite fall more than 1%.

Dow futures lost 12 points. S&P 500 futures and Nasdaq 100 futures both traded below the flatline.

On the earnings news, video conferencing firm Zoom Video Communications’ shares fell 8.6% in pre-IPO trading a day after it beat earnings estimates, but warned of an impending slowdown as the Covid pandemic subsides and demand for long distance contacts diminishes.

The S&P 500 and Nasdaq Composite fell Monday as the market’s emerging markets responded to a surge in bond yields. The US 10-year Treasury yield rose 9 basis points to over 1.62% on Monday.

Stocks initially reacted positively to announcement that Federal Reserve Chairman Jerome Powell was being nominated by President Joe Biden for a second term of four years, raising expectations that the central bank will stay on its bid price if the Economy recovers from pandemic and tries to fight inflation. However, towards the end of the session, markets reversed and yields continued to rise.

On Monday, the Dow Jones Industrial Average rose 17 points after rising more than 300 points at one point in the session. The S&P 500 fell 0.32% after hitting an intraday high during regular trading. The Nasdaq Composite lost 1.26% despite hitting an intraday high at the start of the session.

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“The bullish sentiment was heightened by the announcement that President Biden will reappoint current Chairman Powell,” said Jim Paulsen, Leuthold Group’s chief investment strategist. “In the past few weeks, fears that Lael Brainard might be brought forward to Powell have grown and she has been perceived as the much bigger money dove that had heightened fears of inflation.”

While trading is likely to slow because it is Thanksgiving week and the Fed’s chief decision is behind the market, investors will be watching some economic data to be released on Tuesday, including the Philly Fed. Additional data released later in the week includes weekly jobless claims, a GDP update, personal income and consumer confidence.

“It’s Thanksgiving week so the next few days are likely to be extremely low volume and not likely to have many fireworks,” said Ryan Detrick, chief financial strategist at LPL Financial. “Still, Wednesday will bring the latest Fed minutes and the Fed’s preferred inflation measure in the PCE, so we could have something to think about before we go out and eat a lot of turkey.”

The winning season continues on Tuesday with reports from American Eagle, Best Buy and Abercrombie & Fitch before the bell. Dell Technologies, GAP, HP and Nordstrom report quarterly results after the bell on Tuesday.

Investors are juggling concerns about the coronavirus abroad, too. Chancellor Angela Merkel warned of an increase in the virus.

“Although the number of Covid cases has increased worldwide, there is not much evidence to suggest that the US economy will shut down again as it has in the past,” added Paulsen. “For example, the travel forecast for the Thanksgiving holiday is the strongest since before the pandemic.”

US markets are closed for the Thanksgiving holiday on Thursday. The exchange closes early Friday at 1 p.m. ET.

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